Private Investments

The expected returns for traditional asset classes can be constraining for institutions seeking a targeted rate of return. In conversations with investors, the challenges inherent to private capital investments are clear.

“We cannot be as nimble with the small stuff as we would like to be. Also, we need to get away from doing trades on a regular basis.”

“My biggest operational challenge is keeping track of capital calls and distributions.”

“We have a lot of different funds and money is constantly moving in and out. We have to manage the flow and identify the strategies that should be impacted. It is very complex and complicated. It is difficult to monitor the capital calls and do the reporting.”

Organizations are turning to private investments help improve their risk/return characteristics, but private investments have unique risks and challenges for investors including:

Liquidity: Private investments typically require assets be invested for periods of five – 10 years or even longer. This is one of the factors that drives the so-called “illiquidity premium.”
Access: Performance among the top quartile private managers and bottom quartile vary wildly, but access to the top managers requires long-standing relationships.
Minimums: Regulations require private investors to be sophisticated, and individual managers can set minimums that make proper allocation to these funds challenging. Done right, private capital investments are made over years, not on a “once and done” basis.

We have a number of implementation solutions that can help organizations of any size incorporate the potential risk/return advantages of private capital into their portfolios.

PRIVATE INVESTMENTS

“We cannot be as nimble with the small stuff as we would like to be. Also, we need to get away from doing trades on a regular basis.”

“My biggest operational challenge is keeping track of capital calls and distributions.”

“We have a lot of different funds and money is constantly moving in and out. We have to manage the flow and identify the strategies that should be impacted. It is very complex and complicated. It is difficult to monitor the capital calls and do the reporting.”

IS YOUR ORGANIZATION CONSIDERING PRIVATE INVESTMENTS?