Angel Garcia Diez is head of investments at Spanish insurance group HNA. He explains here why HNA invests through Palico’s digital marketplace.
You’re based in Madrid, which is not a center of international private equity. Does that make it hard for you to find funds using traditional means?
AGD: Yes, and that’s a major reason why we invest via Palico. It’s very difficult for us sitting here in Madrid to connect with managers. Many general partners never visit Spain and they spend little to no time marketing here. Palico is a great tool for investing in funds focusing on opportunities outside of Spain. In fact, I’d say it’s essential for HNA’s non-domestic investment program.
|What kind of funds do you find on Palico?|
AGD: Well, we don’t like investing in big, mainstream funds. What we find in abundance on Palico are the kind of smaller, specialized funds that appeal to us. Palico allows us to commit to funds that are outside of our traditional network and that fill holes in our investment portfolio. Its marketplace is key for portfolio diversification by strategy and geography.
|What’s an example of an ‘off-the-beaten-path fund’ you’ve found on Palico?|
AGD: One is a pan-European venture capital fund we just committed to. It specializes in very early round investments in a range of sectors, including fintech, something we know well because it’s where our own industry is headed. It also invests in an attractive group of European markets, notably Germany, where we really wanted to start investing.
|$227 Million Invested via Palico|
In 2017 limited partners invested $227 million in primary fundraisings and secondaries via Palico’s digital marketplace, overwhelmingly in smaller and more specialized funds. As average fund size grows amidst a record number of fundraisings, Palico’s digital marketplace helps hard-to-find fundraisings and small secondary offerings standout, bringing them to the desktops and smart devices of interested investors the world over. Palico is making private equity ‘alternative’ again, even as the overall industry becomes mainstream.