Description
Private equity is expected to be the highest-returning asset class in our portfolios and offers access to some of the most talented long-term investors and operators of private (non-public) companies. In contrast to the zero-sum game of public markets, we believe private equity as allows investors to benefit from the managers’ ability to add value through strategic, operational and financial levers. Their corporate governance advantage, in combination with typically higher leverage than public companies and the ability to call capital when opportunities arise, results in an asset class illiquidity premium which we estimate to be significantly above public equities over the long-term. We define the private equity asset class broadly to include leveraged buyouts (across all sizes of companies), growth equity, venture capital and distressed/turnaround strategies.
How We Invest
We seek private equity managers who have a demonstrated edge through a combination of deep sector expertise and post-acquisition operating value add. In an increasingly competitive environment, we are focused on unique deal sourcing capabilities and operational expertise as the primary sources of differentiation as opposed to financial engineering. While we invest across a range of private equity strategies, we continue to favour less efficient markets or strategies which require distinctive capabilities to derive an edge. The core of our portfolios are focused on lower middle market investors across both “buy-and-build” strategies and specialists in the consumer, industrial, technology, and healthcare sectors. We also include venture capital to gain exposure to innovation and potentially disruptive technologies. At certain points in the cycle, we will also increase our allocations to managers who embrace complexity in order to acquire assets at a discount to intrinsic value.
Our best ideas in private equity are reflected in our series of multi-manager pooled vehicles which raise capital annually to invest in approximately 8-10 of the most compelling managers and co-investments across buyouts, growth equity, distressed/turnaround and venture capital. We also offer bespoke specialist mandates in private equity for large clients.
