Making Private Equity Alternative Again
January 19, 2018
|Bringing Hard-to-Find Smaller Funds to Investors|
In today’s mature private equity fund industry, smaller vehicles, which frequently operate in less crowded niches, are a valuable source of alpha. The trouble is finding them in a global marketplace where a record 3,129 funds are seeking capital – some 42 percent more than just five years ago. Palico’s digital marketplace brings a rich choice of promising smaller and specialized managers to the desktops of some 1,500 limited partner firms in every region of the world.
Four out of five fund managers raising capital on Palico are seeking $250 million or less, intending to focus on relatively neglected and potentially attractively priced small cap assets; three out of five qualify as emerging managers, i.e. those raising their first or second fund – though most have previous experience at larger funds; two out of five operate in specialist sectors including agriculture, timber, mining, water, shipping and intellectual property; and another two out of five focus on newer regions for private equity investment in Asia, the Middle East, Africa, and Latin America. Listings in Palico’s secondary market are dominated by small secondaries – stakes of $10 million or less in funds that have finished fundraising and are already investing.
|$227 Million Invested via Palico|
In the last year alone, limited partners have invested $227 million, overwhelmingly in smaller and more specialized funds, via Palico’s online private equity fund marketplace. As Palico becomes associated with these off-the-beaten-path fundraisings and secondaries, it’s making private equity an alternative investment category once again, even as the overall industry becomes mainstream.