Yet Palico offers a large variety of emerging market opportunities that can streamline the private equity investment process. Some two out of five primary and secondary investment opportunities among Palico’s listings are focused on the emerging markets of Asia, Africa, the Middle East and Latin America. Moreover, more than four out of five of those offerings are for funds of $250 million or less. They’re not only focused on dynamic family-run companies, but overwhelmingly on the more inefficiently priced small cap sectors of emerging markets. Primary and secondary emerging market opportunities also cover over 30 specialties, ranging from mezzanine finance in Mexico to impact investing in fast-growing Southeast Asian countries.

Altogether, the aggregate capital targeted or raised by primary and secondary opportunities listed on Palico’s digital marketplace amounts to $9.8 billion. Among the fundraisings, the majority have already held at least a first close on capital commitments - demonstrating traction among investors. Some two out of five emerging market fundraisings on Palico represent first-time vehicles, the vast majority run by veteran, but hungry managers, eager to prove themselves as independent operators. This is in the context of recent evidence that the average first-time fund outperforms the average later-generation vehicle.

By bringing fundraisings and secondaries to desktops and smart devices, along with a wealth of information on those opportunities, Palico gives limited partners and their advisors more time to discover, analyze and invest in highly promising, frequently hard-to-find funds. Palico fits seamlessly with all channels of capital commitment, yet its digital marketplace makes fundraisings and secondaries - covering all strategies and regions - more accessible and affordable.

Over time, of course, successful general partners running smaller funds tend to become larger general partners running bigger funds. A small, but significant subset of these managers experience the kind of explosion in demand over time and across fund generations that makes it difficult for investors to access their later, larger vehicles. This is yet another reason why limited partners - even the biggest - should maintain investment programs for smaller managers.

A particularly interesting academic paper that came out late last year indicates that PE-owned companies do better than non-PE-backed firms of similar size, purpose and profitability during downturns - a topic with plenty of relevance for fund managers and investors, given a near-record run of uninterrupted economic growth in the world’s major economies. In light of today’s record purchase price multiples, smaller funds, frequently specialists in uncrowded niches, or purchasers in the relatively neglected lower end of the buyout market, may do better than their larger counterparts in a downturn. Yet another reason why limited partners should consider smaller funds today.

Helping smaller, harder-to-find funds standout is Palico’s speciality. Fund offerings with an investment focus covering 179 of the world’s 195 countries are listed on Palico, with more than four out of five vehicles focused on investing in the particularly inefficient small cap and lower mid-market corporate sectors. Additionally, two out of five operate in specialist sectors including agriculture, credit, 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. A majority of secondaries sold on Palico involve funds that raised $250 million or less from investors. Some 80 percent of transacted secondaries are for stakes worth $10 million or less - what we call ‘small secondaries.’

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 primary fundraisings and small secondary offerings standout. Palico is making private equity ‘alternative’ again.

Indeed, larger funds competing against each other for assets are likely to have a tougher time producing the kind of outsize returns for which private equity is justly celebrated. Today’s behemoths do, however, offer the opportunity to put exceptionally large amounts of money to work in one go, an advantage at a time when investors are loath to let capital earmarked for PE investment lie fallow in exceptionally low yielding investments. Given the simultaneous popularity of large and small funds, a barbell investing style is rapidly developing, with limited partners looking to commit large sums to big funds, but seeking a bigger bang for their buck by investing lesser amounts in those smaller, frequently sector-focused funds and emerging managers found on the road less traveled - what Palico dubs alternative PE.

In today’s mature private equity fund market, where a record 3,129 funds are seeking capital - some 42 percent more than just five years ago - it can be hard for limited partners to find the time to source and evaluate smaller managers. In fact, LPs these days actually find little time to do anything more than re-up with existing relationships, given the aggressive sideways expansion of large general partners into new strategies. Yet Palico’s digital marketplace brings a rich choice of promising smaller and specialized managers to the desktops of over 1,500 limited partner firms in every region of the world. Palico provides over-taxed LPs an efficient means to evaluate, analyze and invest in new GP relationships.

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, credit, 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. Palico is making private equity ‘alternative’ again, even as the overall industry matures. In 2017 limited partners invested $227 million in primary fundraisings and secondaries via Palico’s digital marketplace, overwhelmingly in smaller and more specialized funds.

The mostly newly minted firms behind first-time funds - despite their inexperience as independent managers - are doing well, capturing 8 percent of total fundraising in 2017 - the most since 2011. This renaissance is largely explained by the weakening of top quartile persistence (one study indicates that just 12 percent of top-performing private equity managers now have back-to-back top-quartile funds versus 28 percent prior to 2004) and new evidence that the average first-time fund outperforms the average later-generation vehicle.

A recently concluded study by Massachusetts Institute of Technology economist Antoinette Schoar indicates that only 12 percent of top-performing private equity managers now have back-to-back top-quartile funds, versus 28 percent prior to 2004 and 31 percent before 1999. This helps explain a variety of trends, including the expansion of limited partner staffs, the increasing willingness of LPs to invest in first-time funds, the popularity of investing in less crowded specialty niches, and the growing use of digital tools like Palico’s marketplace - a means of streamlining complex PE fund selection. Put simply, less reliable top-quartile persistence puts a premium on selection skill, increased resources, and digital innovation.

Still, first-time fundraising is no cakewalk. Roughly half of all private equity investors simply won’t consider first-generation funds, since there is no independent track record to assess. This makes it essential for first-time fund managers to zero-in on investors predisposed to investing in maiden vehicles.

Palico is a particularly effective fundraising channel for first-time funds and a prized marketplace for investors looking to commit to inaugural funds. One-third of the capital raised on Palico since its launch five years ago has gone to first-timers (and slightly more than 50 percent has been raised by first or second generation funds). Over two-fifths of current investable fundraisings on Palico are for first-time vehicles covering buyouts, growth, venture capital, real assets, turnaround, credit and other strategies. In aggregate, these first-time funds are currently targeting $11.3 billion and have raised 13 percent of that sum, or $1.5 billion.

Palico is a classic disruptor: it cuts costs and speeds up private equity commitment for all types of limited partners and general partners - small, medium and big, operating on their own or with the help of advisors - anywhere in the world. Today, Palico’s marketplace for investable primary and secondary opportunities unites over 3,000 LPs with over 5,000 GPs. Join them to see how digital streamlines fundraisings and secondaries.

One of the biggest private equity investors, Hamilton Lane, is on pace to receive an unprecedented 800-plus private placement memorandums in 2017. It’s the fourth annual record-breaker in a row for fundraising proposals, and not just at Hamilton Lane. All investors it seems, from the smallest to the biggest, face the challenge of how to effectively vet today’s daunting variety of PE investment options.

A recently concluded study by Massachusetts Institute of Technology economist Antoinette Schoar indicates that only 12 percent of top-performing private equity managers now have back-to-back top-quartile funds, versus 28 percent prior to 2004 and 31 percent before 1999. This helps explain a variety of trends, including the expansion of limited partner staffs, the increasing willingness of LPs to invest in first-time funds, the popularity of investing in less crowded specialty niches, and the growing use of digital tools like Palico’s marketplace - a means of streamlining complex PE fund selection. Put simply, less reliable top-quartile persistence puts a premium on selection skill, increased resources, and digital innovation.

Indeed, the latest investor survey from Coller Capital - a widely followed indicator of investor sentiment - shows that limited partners believe they are failing to keep up with new private equity opportunities. Virtually half of North American LPs, nearly two thirds of European LPs and over two fifths of Asia-Pacific LPs say their organizations aren’t changing fast enough to take full advantage of PE opportunities. And three out of four of the world’s LPs believe they could significantly improve their PE programs through better use of “external data sources,” a catchall category that includes everything from third party software and cloud applications to digital marketplaces like Palico that bring the data rooms of investable primary and secondary opportunities to the desktops and smart devices of LPs.

Not enough LPs realize just how much third party resources like Palico’s digital marketplace can help them. Among investors in the Coller survey who say they are under-using third party resources, three quarters believe they could improve portfolio management through these tools. Yet only one third share the conviction that they could register higher PE returns. We believe that as PE investment options grow, LPs who neglect digital marketplaces like Palico miss out on some of the best investment opportunities, and thus the potential to further improve their returns. Palico fits seamlessly with all channels of capital commitment, yet it is altering PE with a digital marketplace that makes fundraisings and secondaries - covering all strategies and regions - more accessible and affordable.

If cows are connected to the internet to increase productivity, you have to wonder why private equity general partners aren’t.

High net worth individuals and their representatives, including family offices, registered investment advisers and private banks, account for 31.8 percent of the 2,826 accredited investors from over 80 countries looking for private equity fundraisings, secondaries and co-investments on Palico. That they account for almost a third of investors on Palico isn’t surprising. Data from the U.S. Securities and Exchange Commission indicates that HNWIs are growing their share of private equity investment faster than any other type of investor.

Private equity general partners and limited partners have been hit by waves of complex and often contradictory regulatory reform in recent years.  Last month’s lifting of the 80-year-old ban forbidding mass solicitation in the United States for private equity funds, and the implementation in July of the European Union’s Alternative Investment Fund Managers Directive -  seen by many as diametrically opposed to the U.S. reform - are the most emblematic of these changes.  We think they underline the value of an online private equity fund marketplace like Palico.