Yes, and they have been for some time. Progress has been slow, but current market and regulatory conditions could enable a breakthrough. The impact will be felt primarily in the upper registers of the private equity arena. I’m viewing Vanguard’s recent private equity–related announcement as the first of a two-step process. The first step is…
Mega funds are indeed in a category by themselves, namely that of a new public markets proxy.
Co-investments are one of only a handful of control levers within an LP’s toolbox, and we encourage all private market investors, regardless of size, to consciously consider implementing a co-investment program.
Growth equity continues to offer investors a compelling return profile that combines the downside protection of buyouts with some of the upside potential of venture capital.
Yes. At a minimum, investors should consciously consider it. The co-investment “craze” isn’t going away anytime soon—we estimate co-investing currently accounts for nearly one-third of all private investment activity—and there are structural reasons why it will continue, as we will discuss. For investors with allocations to private investments, adding co-investments offers some advantages; namely, lower fees…
In short, no—their use isn’t going away any time soon. Rather than avoid them, incorporate new elements to more clearly assess the manager’s true investment skill.
It sure looks like it. The increasingly unforgiving nature of public equity markets, coupled with the continued evolution and growth of private investment markets, is making it easier for more companies to stay private, with some CEOs avowing to do so indefinitely.
Investors seeking to gain initial exposure to private investments should actively consider secondaries, rather than funds-of-funds, as the very first step to constructing a long-term private equity portfolio.
The private equity market has evolved to become increasingly sophisticated and competitive, resulting in a profusion of specialized sub-strategies (for example, co-investing, direct investing, sector-focused strategies) and managers expanding into geographies, sectors, and/or asset classes that may be new to them and their investors. In this context, fund-level net to LP benchmarks, while still necessary, are not always sufficient to evaluate performance. This paper introduces Cambridge Associates’ Investment-Level Benchmarks and shares examples of the types of perspectives they can offer subscribers.
No. You just need to know where to look. The informed alternative investor is focused on identifying managers with the potential to outperform. Where to find these managers? The lower end of the private equity arena.