Private Equity

Investors always have to trust the fund managers to which they entrust their capital; but even better than trust is alignment.

Australian investors have poured money into private equity (PE) investments in recent years, but asset valuations are prone to the same combination of multiple and margin compression, and interest-rate pressure, that affects the listed markets. A big chunk of the pile of PE value is potentially facing high fire risk.

The group says tackling liquidity and accessibility barriers are key to the success of its private equity secondaries fund. Researcher Lonsec agrees, recently giving the fund a ‘Recommended’ rating on its platform.

Secondaries now represent a core pillar of many investors’ alternative assets program, according to Coller Capital.

Two big factors make the case for investment in a financial advice business – or one that supports the industry – compelling, the Brisbane-based PE purveyors believe.

What the Brisbane-based lower-mid tier private equity group is pulling off is emblematic of the success private equity players are enjoying in recent times. But each PE player has their own unique strategy that largely defines just how well they’re doing.

Private market returns are nothing to sneeze at, but investors need to consider whether their prospective allocation is worth doing the hard work to understand the liquidity and transparency issues that come with it.

Companies are eschewing publicly listed markets in favour of private ownership, which has warped the availability of information to investors. For those with access, the advantage is heightened in certain sectors.

The private markets juggernaut is one that has also thrown up a wealth of data that other players can use to sharpen up due diligence when making their own investment decisions – especially in the growing secondaries market.

Private markets are worth around $14 trillion globally, ASIC believes. It’s not sure, and that uncertainty hints at the wider problem – private markets, and their effect on public ones, is still largely a mystery.

Long the bailiwick of institutional investors, private markets secondaries are now trickling down to the wealth space as the market grows and new vehicles expand access.

The phenomenal growth of private equity’s big players has left a yawning gap in the lower-mid market, which enterprising players like Fortitude Investment Partners are all-too keen to step in to and take advantage of.