Though large fundraisings have become increasing specialized in recent years, small fundraisings targeting $250 million or less have become even more nichey. This is borne out by a look at the most popular small fundraisings listed in Palico’s private equity marketplace.
|Buyout Strategies with a Twist|
The only two vehicles among Palico’s most popular fundraisings focusing on debt-backed buyouts – sixth-ranked Five Points Small Buyouts Strategies III and seventh-ranked Yenni Income Opportunities – put an emphasis on special traits. Five Points is a fund-of-funds focusing on buyout managers who purchase small companies where growth is likely to be at least as large a driver of potential returns as buyout debt. Yenni, which buys firms directly, focuses on even smaller companies, and will not invest unless there is a prospect of significant annual cash distributions from operations. These funds put an emphasis on hunting in the most inefficient part of the buyout market and represent a break with the past by de-emphasizing the importance of debt in generating returns.
|Three Venture Funds, but Only One Investing Principally in the U.S.|
Venture capital, focused on the financing of new, often tech-based companies, accounts for the largest number of Palico’s popular small fundraisings – three funds, or 30 percent of this diverse group. Yet interestingly, among the VC funds, only eighth-ranked Blind Squirrel Entertainment is mainly looking to invest in the U.S (though in another niche – gaming). Mirroring growing interest in venture capital investing beyond the U.S., the most popular small fundraising open to investment on Palico, Seed Equity Ventures Fund I, aims to buy companies in Europe and Asia in addition to the U.S. Meanwhile, the areas of investment focus for fourth-ranked fundraising Tembusu ICT I are China, India and Southeast Asia.
|Investors Gravitate to Esoteric Private Equity|
Two of the most popular small fundraisings – third-ranked Mantra Alternative Private Equity, and fifth-ranked Confideo Litigation Finance – invest in relatively offbeat sectors, illustrating investor hunger for investments in areas where they believe there is less competition for assets. Mantra invests in domains like intellectual property, and water and advanced materials. Confideo intends to invest in European commercial litigation suits.
|Direct Secondaries, Distressed Oil & Gas, and Forestry|
The remaining fundraisings in the top ten list include second-ranked Saints Ventures II, a specialist in the restructuring of funds, a subsector of the secondary market for stakes in closed private equity funds; ninth-ranked Crosswind Special Situation, an investor in distressed oil & gas operations and real estate; and 10-placed timber investor TIR Europe Forestry Fund.
|The Full Range of Private Equity at Your Fingertips|
Private equity today embraces a much broader range of investment strategies and regions than it did just five years ago. Mainstream or more specialized fundraisings – anywhere in the world – are easy to find using Palico’s online marketplace. Palico’s listings of investable private equity vehicles make transacting simpler for both limited partners and general partners.