Strategy

Strategy: Disciplined process and diversified selection result in worthwhile investments

While exploiting current windows of opportunity, our strategy primarily targets areas where we believe the next decade will bring growth trends and opportunities for alpha managers. The overall foundation is thorough due diligence in three uncorrelated segments of the private equity universe.

 

 

Investment strategy

Our investment strategy is based on identifying areas of investment that create opportunities for skilled managers with operational expertise focusing on transforming companies. While the current market situation may offer one dominating strategy, successful long-term investment in the private market demands an understanding of secular trends in different market segments while avoiding overheated areas by making room for contrarian investments. We believe that underlying opportunities exist in each sector chosen for our portfolio of funds in our global funds of funds to create more than risk-adjusted returns.

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Strategic portfolio advice

Middle market buyout: 50-85%
Special situation: 10-25%
Growth capital: 5-25%
 Strategic portfolio advice

Europe: 30-50%
US: 30-50%
Asia and Latin America: 20-40%

 

Manager selection

The strategy that we have followed for the last 15 years – which has generated a significant outperformance to public equity and private equity benchmarks – is based on finding private equity managers with transactional experience utilised on investment strategies dedicated primarily to mid-market buyouts, growth equity and special situation. Building a private equity portfolio from scratch typically requires at least 4-6 fund commitments per year over a period of 3 to 4 years.

Recommending such a rather broad allocation range as set out in the box above reflects the difference between our current allocation expectations and the flexibility needed to avoid having to recommend allocation of capital to managers that do not meet our demands in the target mix of region, stage and strategy.

Our foundation of thorough due diligence of managers’ ability to generate alpha ensures selection of a cohesive manager team with potential to consistently outperform its peers on top-line growth in transforming companies as well as marginal improvement and strategic positioning for making the right acquisitions as well as optimised and timewise exits.