by Andrés Ramos, Content Marketing Specialist – eVestment Private Markets
With 2020 behind us and digital due diligence & fundraising now the norm, fund managers need every insight and advantage available to them to rise above their virtual competition and win commitments.
One advantage, at the disposal of eVestment Market Lens users, is access to public pension plan portfolio reviews. These documents, produced by internal investment teams or the investor’s consultants, are a look behind the curtain at the inner workings of an institutional-level investment program.
In our recent edition of the Monthly Monitor, we highlighted one of these reviews as being one of the most viewed Market Lens documents in November, the Private Equity Review for Contra Costa County ERA (CCCERA). Let’s take a look what we can learn about the pension plan’s approach to private equity investing from the document.
Planning ahead with new insights
Portfolio Reviews offer fund managers a glimpse into how an investor is currently positioned within an asset class, if there are any upcoming changes to that positioning, and what the investor seeks to accomplish with those changes.
The CCCERA review highlights a very significant pivot in the pension plan’s approach to private equity investing. The document describes the current portfolio exposure by fund type as 76% fund of funds, 22% primary funds, and 2% other. The targeted portfolio exposure for the pension plan is 80% primary funds and 20% other. CCCERA plans to completely eliminate fund of funds investing in favor of direct fund investing. Further to this, the review indicates that the pension plan is currently 34% allocated to buyout funds but has a long term target of 75%.
This is a massive shift that will take years to accomplish but that insight and detail is where the value of the review is for fundraising managers. Understanding what types of funds an investor is looking for tells a manager if they should even bother pursuing that LP. In the case of CCCERA, according to their “Top Down Considerations,” North American buyout funds are an area of focus for the coming year.
Finding where your fund fits
Identifying investors who are pursuing funds with a strategy like yours is only half the battle. The other half is finding LPs with the right bitesize goals. Are CCCERA ready to cut a check for $200 million to your new multi-billion-dollar fund, or are they making smaller commitments? The answer here is the latter. According to the review, the pension plan most recently allocated $164 million to four buyout funds. It also offers the helpful detail that each commitment was a new relationship for CCCERA.
This is great news for US-based buyout funds and looking for $50 million checks from each of their prospective LPs, and no prior commitments from CCCERA. These are the types of key insights that Market Lens users are finding in portfolio reviews that are helping them get a leg up on the competition in today’s virtual fundraising environment.
Better insights for a better year
Interested in more insights like these? Each month eVestment Private Markets release the Monthly Monitor, a report that aggregates and analyzes data on 475 public plans’ reported fund commitments to Private Equity, Private Debt, Real Estate and Real Assets funds, as well as the news and documents of most interest to industry professionals.
The report offers insights into the fund strategies most popular with investors, the most active plans and consultants and the latest fundraising activity of their peers.
Next month we are publishing our year-end 2020 edition of the report which will feature extra insights on how the private markets industry over the course of the turbulent and difficult year we had.
Click here to subscribe and receive the year-end report to your inbox.