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Matt Hougan, Bitwise, Fund Shack podcast

Bitcoin: The Alternative You Can No Longer Ignore

In this episode of Fund Shack, Ross Butler speaks with Matthew Hougan, Chief Investment Officer at Bitwise Asset Management, the firm that launched the first crypto index fund and now oversees over $10 billion in assets. Previously CEO of ETF.com and chairman of Inside ETFs, Matthew has been at the vanguard of two financial revolutions: exchange-traded funds and now crypto investing.

They explore why Bitcoin is no longer an asset institutional investors can afford to ignore, why it fits comfortably into modern portfolios, and how it is evolving into a global macro asset, one that could redefine value, collateral, and even the foundations of finance itself.

From Retail Phenomenon to Institutional Essential

Bitcoin has long been dismissed as a retail-driven speculation. But institutional adoption is accelerating fast. Since 2023, US Bitcoin ETFs have amassed over $37 billion in assets, eclipsing every ETF launch in history. A third of that capital is institutional, and Bitwise alone has seen its AUM tenfold in just 18 months.

Institutions are realising that Bitcoin, when stripped of its reputation, offers a compelling asset profile: high historical returns, low correlation with stocks and bonds, deep liquidity, and rising relevance in macro portfolios.

Rethinking Bitcoin’s Role in the Portfolio

Many asset allocators are re-examining where Bitcoin fits. Some bucket it within high-beta equities or emerging tech. Increasingly, though, it’s being treated as an alternative asset due to its unique risk-return characteristics and lack of correlation.

Institutions are beginning to see that a 1–2% Bitcoin allocation can materially improve a portfolio’s Sharpe ratio. For the first time, regulatory clarity and ETF wrappers allow them to express that view efficiently, with custody, liquidity and compliance challenges largely solved.

Bitcoin as Digital Gold… and More

Bitcoin is optimised not for speed or smart contracts, but for decentralised value storage. Its clearest comparable is gold, yet it improves on it by being portable, programmable, and verifiable in real time. Today, Bitcoin’s market cap is under $2 trillion; gold’s is over $21 trillion. That gap represents upside for investors who believe in the digital gold thesis.

But Bitcoin isn’t just a store of value. It’s a non-political currency in a fragmenting world. As global trade moves away from sole reliance on the US dollar, Bitcoin could become a neutral bridge currency, used by countries that want a settlement mechanism free from geopolitical alignment.

A Macro Asset in the Making

Macro hedge funds increasingly use Bitcoin for after-hours positioning, risk-on trades, and global hedging. It trades 24/7, settles instantly, and provides pristine collateral, all features traditional finance struggles to match.

Bitwise’s own ETFs give institutions this exposure in a low-cost, fully regulated wrapper, with Coinbase custody, cold storage, and full on-chain visibility.

Looking Ahead: Finance on the Blockchain

Bitcoin’s potential doesn’t stop with passive holding. The crypto ecosystem is already redefining capital markets. On-chain lending, instant collateralised loans, and programmable money are standard in decentralised finance. For traditional dealmakers and credit investors, this foreshadows faster, more transparent, and radically more efficient transaction rails.

Hougan believes traditional finance is slowly merging with this future. Complexity is not a flaw but a sign of technological evolution. In time, Bitcoin’s programmability and security could replace many financial intermediaries, not just as an asset, but as a layer of infrastructure.

Advice for Professionals and Allocators

For financial professionals, Matthew’s message is simple: start experimenting. Buy Bitcoin. Try DeFi. Use it as tuition for a new era of finance. He draws a parallel to the ETF boom, those who got in early didn’t just profit; they rewrote the rules.

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Contact Information: About Fund Shack: Fund Shack is a private equity podcast and digital media channel for alternative investment professionals. Fund Shack is produced by Linear B Group Limited.

Cyril Demaria, Fund Shack, private wealth

The complexities of introducing private markets to HNWs, with Cyril Demaria

In this episode of Fund Shack, Ross Butler is joined by Cyril Demaria-Bengochea, Head of Private Market Strategy at Julius Baer, Associate Professor at EDHEC Business School, and author of multiple leading books on private equity. Cyril has worked as an expert for Invest Europe, ILPA, and the European Commission, and he brings a unique perspective that combines academic rigour with practical industry insight.

Together, they explore the ongoing transformation of private markets, focusing in particular on the challenges, and limitations, of accessing capital from private wealth clients.

A shift from institutions to individuals

Institutional capital has long been the cornerstone of private markets, but fund managers are increasingly turning their attention to the private wealth segment. However, as Cyril points out, this market is fundamentally more complex. Individual investors are highly heterogeneous, each with unique goals, constraints, and levels of financial sophistication.

The Challenge of Democratisation

Much has been made of the “democratisation” of private equity, but Cyril believes the term may be misleading. True access remains limited, especially when trying to balance diversification, cost-efficiency, and liquidity. Although evergreen structures have been hailed as a solution, Cyril estimates they still represent just 1–2% of total assets under management in private markets—highlighting how early-stage the trend really is.

Private Markets: A Three-Dimensional Investment

One of the major hurdles for private wealth clients is understanding the time dimension of private markets. Unlike traditional public investments, private equity involves long holding periods, delayed distributions, and a lack of liquidity. Cyril argues that much of the complexity in private markets stems from this third dimension—and that many investors (and advisers) still struggle to properly account for it in portfolio construction.

Fund Structures: No One-Size-Fits-All

While closed-end funds remain the dominant structure for good reason—offering embedded discipline and clear payout timelines—other structures are growing in relevance. Cyril sees increasing use of evergreen and semi-liquid structures, particularly for clients seeking operational simplicity.

Rather than any one structure “winning,” he envisions a world where different vehicles coexist and serve different needs. The key is understanding the investor’s objectives and building a tailored toolbox that balances access, complexity, and outcome alignment.

Podcast Sponsor:
This episode was designed and produced by Linear B Group, a leading content marketing agency focused on financial and professional services.

Subscribe Now on your preferred platform to gain expert insights into private capital.

Contact Information: About Fund Shack: Fund Shack is a private equity podcast and digital media channel for alternative investment professionals. Fund Shack is produced by Linear B Group Limited.

Donald Chew

American corporate finance & the wealth of nations, with Donald H. Chew, Jr

Donald H. Chew, Jr. has been the editor of the Journal of Applied Corporate Finance for 45 years. In this episode, Donald gives his big picture take on the central role of American-style corporate finance in driving wealth and prosperity. 

We discuss:

  • What is the right metric for assessing long-term company value creation?
  • How activist investors helped fix America’s broken corporate governance model of the 1970s to usher in 40+ years of growth. 
  • Why the Chinese economy is not on the same trajectory. 
  • Why the Japanese economy has suffered a 30 year downturn (yes it’s a corporate governance problem).
  • How the same thing could happen in Europe.
  • The link between failure of the 1970s conglomerates, the GFC, Japan’s economic catastrophe and modern ESG.

Drawing on Donald’s recent book, The Making of Modern Corporate Finance: A History of the Ideas and How They Helped Build the Wealth of Nations, this is the story of how activist investors helped (to coin a phrase) Make American Corporate Finance Great Again. 

Insights  

The Shareholder Revolution and the 1980s Breakup of Conglomerates
Corporate America faced stagnation in the 1970s, with bloated conglomerates prioritizing stability and full employment over efficiency and investor returns. The 1980s saw a reassertion of investor control, breaking up these conglomerates and restoring focus on shareholder value. The transformation led to a surge in U.S. productivity and economic expansion, contrasting with Japan’s stagnation under its model of corporate governance that prioritized employment over efficiency.

Japan’s Corporate Governance Failure
Japan’s economy has been in stagnation for 30 years, a result of corporate structures that resist shareholder influence, limit workforce reductions, and prioritize stability over profit maximization. The failure to optimize capital allocation has led to declining productivity and even population shrinkage. Today, Japan’s business leaders are beginning to recognize the value of shareholder activism as a tool for economic revival.

China’s Middle-Income Trap and Financial Market Manipulation
Donald argues that China’s financial system is a “caricature of American capitalism.” While massive infrastructure and construction projects give the illusion of economic success, state-controlled companies fail to generate long-term value. IPOs are manipulated, capital is trapped within inefficient state-owned banks, and foreign investment remains limited due to a lack of investor protections. The absence of effective corporate governance is stalling China’s economic transition.

Private Equity and the Active Investor Model
Private equity and activist investors have played a pivotal role in improving corporate governance worldwide. By taking control of underperforming companies and refocusing on efficiency and profitability, private equity has demonstrated its ability to drive superior returns and economic growth. While often criticized, Donald argues that private equity’s approach to financial discipline is essential for long-term corporate health.

The Global Financial Crisis: A Failure of Political Incentives
Rather than being a failure of capitalism, the global financial crisis was driven by political incentives that encouraged subprime lending and artificially expanded home ownership. Government-backed entities like Fannie Mae and Freddie Mac distorted the housing market, leading to unsustainable risk-taking. European banks, seduced by artificially high-rated mortgage-backed securities, compounded the problem. The crisis, Donald suggests, highlights the dangers of political interference in free markets.

The Future of Corporate Finance and National Prosperity
Donald’s book argues that corporate finance is the foundation of national economic prosperity. The U.S. stock market serves as a forward-looking indicator of productivity, outperforming global peers due to a more dynamic and investor-driven corporate culture. While GDP remains a lagging and often misleading economic metric, corporate financial performance provides a more accurate picture of wealth creation.

Has ESG Diluted the Profit Motive?
Donald examines whether ESG (Environmental, Social, and Governance) initiatives align with shareholder value or create a new set of vanity metrics that can distort corporate priorities. He contrasts Milton Friedman’s shareholder primacy with Michael Jensen’s concept of enlightened shareholder value maximization, arguing that corporate social responsibility must be balanced against long-term profitability to avoid the pitfalls of politically driven economic policies.

Final Thoughts: America’s Economic Resilience
Despite concerns over political instability, Donald remains optimistic about the resilience of American corporate finance. Unlike the centralized economic models of Japan and China, U.S. corporations are structured to adapt and thrive. The ability of businesses to restructure, cut costs, and refocus on shareholder value will continue to drive American prosperity, even in turbulent political times.

Podcast Sponsor:
This episode was designed and produced by Linear B Group, a leading content marketing agency focused on financial and professional services.

Subscribe Now on your preferred platform to gain expert insights into private capital.

Contact Information: About Fund Shack: Fund Shack is a private equity podcast and digital media channel for alternative investment professionals. Fund Shack is produced by Linear B Group Limited.

Raja Hadji-Touma, Corsair Capital, Fund Shack podcast

Transformative financial services investment, with Corsair’s Raja Hadji-Touma

Raja Hadji-Touma, Partner at Corsair Capital and Head of European Buyouts, discusses Corsair’s focus on asset-light businesses in financial services, technology, and business services. He explains Corsair’s thematic approach to identifying trends and opportunities, emphasizing hands-on value creation, digitization, and scaling businesses through operational and strategic improvements.

Insights and Highlights

Specialization and Evolution Corsair Capital, originally part of JP Morgan, began as a solution to recapitalize troubled financial institutions after the U.S. Savings and Loan crisis. Over time, the firm shifted focus from capital-intensive businesses to asset-light services and technology within the financial services ecosystem. This evolution allows Corsair to focus on operational efficiency and scalable growth, targeting sectors like insurance distribution, fund administration, and B2B payments.

Value Creation and Hands-On Approach Corsair prioritizes active value creation by establishing clear 100-day and long-term strategic plans with management teams. Their approach involves operational improvements, talent development, and technology enhancements. With a focus on institutionalizing businesses, Corsair utilizes operating partners to assess organizational needs, streamline go-to-market strategies, and execute M&A strategies for growth.

Market Trends and Opportunities The firm targets fragmented markets, especially within insurance distribution and B2B payments, leveraging consolidation opportunities to scale businesses. Raja highlights the impact of AI and automation as key trends driving efficiency and new investment avenues. Corsair also sees regulatory requirements as growth catalysts, creating demand for compliance-related services and technologies.

Sector Focus: Building Platforms in Niche Markets Corsair focuses on mid-sized businesses with EBITDA between $5-20 million, scaling them to $50-70 million through buy-and-build strategies. The firm emphasizes recurring revenue models, high cash flow conversion, and resilience against economic cycles. Their thematic approach allows them to identify promising sectors and proactively source deals, often in bilateral settings.

Outlook and Strategic Growth Despite slower deal flow in 2024, Corsair remains optimistic about the next six to nine months as private equity adjusts to market conditions. With strong sector tailwinds, such as digital transformation and regulatory compliance, Corsair continues to back businesses positioned for long-term value creation and consolidation opportunities.

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Contact Information: About Fund Shack: Fund Shack is a private equity podcast and digital media channel for alternative investment professionals. Fund Shack is produced by Linear B Group Limited.

katie@linearb.com

Arjun Raghavan, CEO, Partners Capital, Fund Shack podcast

The man private equity execs trust with their money

Arjun Raghavan, CEO of Partners Capital is the man private equity executives trust with their money. And not just them. Partners Capital has evolved from managing private equity executives’ wealth to overseeing $60 billion for smaller endowments, family offices, and foundations globally.

In this conversation, Arjun speaks to Ross Butler about the firm’s “Advanced Endowment Approach”, emphasizing diversification, resilience, and early-stage access to niche opportunities.

Origins and Growth
Partners Capital was founded in 2001 to offer investment management services inspired by the endowment model. Initially focused on private equity partners, the firm expanded to serve smaller institutional clients and family offices. Under Arjun’s leadership, the firm scaled operations globally, now managing $60 billion across Europe, Asia, and the US.

Twin-Engine Investment Philosophy
Central to Partners Capital’s strategy is the twin-engine model. The beta engine focuses on cost-efficient diversification across traditional and alternative asset classes. Meanwhile, the alpha engine targets illiquid, high-return opportunities, providing both resilience and enhanced returns. Together, these engines ensure robust portfolio performance through cycles.

Adapting to Market Dynamics
In a challenging market environment marked by concentrated gains in public equities and the saturation of alternatives, Partners Capital remains agile. It prioritises resilience through true diversification, embracing strategies like private debt, venture capital, and specialist asset management.

#PrivateEquityPodcast #AdvancedEndowmentApproach #PartnersCapital #PrivateEquity #Diversification #FamilyOffices #EndowmentModel #AlternativeInvestments #FundShackPodcast #ArjunRaghavan

NewVest, Edward Talmor-Gera on Fund Shack

The dawn of passive investment in private markets, with NewVest

Ross Butler speaks with Edward Talmor-Gera, Founder and CEO of NewVest, and Matthew Chapman, Director at NewVest. NewVest is a pioneering company providing low-cost, diversified index funds for private equity, private debt, and other private market strategies — revolutionizing how investors access private markets.

Edward and Matthew delve into how NewVest is challenging the conventions of private equity by creating passive exposure to the asset class, similar to index funds in public markets. The conversation looks at the rationale for a passives component to private markets programmes, and highlights NewVest’s novel approach, which offers institutional and private investors access to the world’s largest private equity funds with reduced fees and simplified processes.

Insights: Why Passive Investing in Private Markets is Revolutionary

Edward explains how indexing challenges traditional notions about private equity by providing diversified exposure to the market’s average return, which has consistently outperformed the median. He reveals that 70% of private equity funds in any vintage year underperform the pooled average, making an index approach both efficient and attractive.

Debunking Myths About Private Equity Performance

Edward and Matthew address a common myth: that trying to select top-performing funds is the only way to succeed in private equity. They share data proving that relative performance persistence among fund managers is statistically limited, making an index strategy a reliable alternative.

NewVest’s Unique Approach

Fund Structure: NewVest employs a no-management-fee structure, charging only a low carry. 

Access to Top Funds: NewVest invests in the 50 largest private equity and private debt funds each year, gaining near-complete access to the top players in the industry, including Blackstone, KKR, and Carlyle.

Diversification and Cost Efficiency: By weighting investments according to target fund sizes, NewVest offers exposure to the asset class while drastically reducing fees and risk compared to active fund selection.

The Evolution of Private Markets Investing

Matthew emphasizes how passive instruments complement active strategies, allowing investors to focus on areas where they can achieve true alpha while leveraging the stability of an index for broader diversification.

Future Plans and the Vision for Private Markets

NewVest envisions a future where passive investing in private markets is as ubiquitous as it is in public markets. They aim to introduce sector-specific and niche indices, such as clean tech or geographic-focused products, and even indices for first-time funds.

Aligning Interests and Democratizing Access

Edward shares how NewVest’s alignment with LPs and innovative approach is attracting institutions, family offices, and even individual investors. 

#PrivateEquity #PassiveInvesting #PrivateMarkets #NewVest #PrivateEquityPodcast #AlternativeInvestments #Diversification #FundShackPodcast

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group

David Whileman, Inflexion, on Fund Shack private equity podcast

The huge opportunity in minority private equity, with David Whileman, Inflexion

Ross Butler speaks with David Whileman, Partner at Inflexion Private Equity, about the untapped potential of minority private equity investments. David shares how minority investing provides entrepreneurs with the resources to scale without selling their businesses. The conversation explores the fund’s strategy, its impact on portfolio companies, and the competitive advantages of minority investments in addressing a vast market underserved by traditional private equity.

RW Blears: Our sponsor for this episode is RW Blears, a UK law firm specialising in fund management. If you are a UK venture capital manager or growth investor and need a trusted legal adviser, visit https://blears.com/

Insights:

The Untapped Potential of Minority Investments:
David explains how minority investing offers private equity benefits without requiring businesses to sell outright. This approach opens private equity to 75% of companies that are not typically for sale, particularly family-owned or entrepreneur-led businesses.

Inflexion’s Partnership Capital Fund Performance:
Since launching in 2015, the fund has raised £1.75 billion, completed 24 investments, and exited nine, including several that achieved exceptional growth. David emphasizes the fund’s ability to serve as the first institutional investor for established companies averaging £350 million in value.

Building Trusted Relationships:
Key to minority investing is fostering trust and alignment with entrepreneurs. David highlights how Partnership Capital avoids prescriptive exit strategies, allowing for collaborative decisions that benefit both investors and business owners.

Expanding Globally and Corporate Partnerships:
Inflexion has extended its reach across Europe and recently into corporate partnerships, where it supports divisions of large corporations seeking independence while maintaining alignment with their parent companies.

Value Creation Beyond Capital:
Inflexion delivers more than funding, offering expertise in talent management, technology adoption, pricing strategies, and global expansion. Its offices worldwide provide portfolio companies with the tools to enter new markets and scale effectively.

Cultural Fit and Talent Recruitment:
David underlines the importance of hiring professionals with emotional intelligence and entrepreneurial mindsets. He describes Inflexion’s team as diverse and collaborative, ensuring alignment with the needs of entrepreneurs.


#PrivateEquity #MinorityInvesting #PartnershipCapital #InflexionPrivateEquity #Entrepreneurship #BusinessGrowth #PrivateEquityPodcast #DavidWhileman #FundShack #AlternativeInvestments #CollaborativeInvesting #PrivateEquityInsights #RossButler

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group

Colm Walsh, ICG, Fund Shack, private equity podcast

The first listed private equity company, still going strong. With Colm Walsh

In this episode of Fund Shack, Ross Butler speaks with Colm Walsh, Managing Director of ICG Enterprise Trust. ICG Enterprise Trust is a listed private equity investor managed by ICG, a global alternative asset manager. Colm shares insights on ICG’s investment strategies, including their focus on buyouts, the benefit of being part of ICG’s extensive platform, and the importance of experienced managers in achieving consistent returns. They also discuss the unique advantages of the investment trust structure for private equity and Colm’s perspective on the evolving private equity landscape.

ICG Enterprise Trust and Its Role in Private Equity:
ICG Enterprise Trust is a listed private equity investor focusing on buyouts. As part of ICG’s broader alternative asset management platform, it benefits from access to a vast ecosystem of managers and market insights. ICG Enterprise is the UK’s oldest listed private equity vehicle, having been formed in 1981.

Investment Strategy Focused on Buyouts and Defensive Growth:
ICG Enterprise Trust primarily invests in cash-generative, EBIT-positive companies, favoring the established private equity markets in North America and Europe. They focus on sectors that demonstrate “defensive growth,” such as pet products and fire protection services, which can sustain growth even during challenging economic times.

Diversified Portfolio with Primaries, Secondaries, and Co-Investments:
ICG Enterprise Trust diversifies its investments through a mix of primary fund commitments, secondary investments, and co-investments. Around 30% of the portfolio is tied to ICG’s network, providing Colm and his team with enhanced diligence capabilities, particularly for co-investment opportunities.

Balancing Risk and Return Through Experienced Managers:
Colm emphasizes the importance of backing experienced and established managers who have developed a strong playbook and pattern recognition. This conservative approach is geared towards minimizing loss ratios and achieving consistent returns, appealing to public shareholders seeking stability in private equity.

Advantages of the Investment Trust Structure for Retail Investors:
Colm highlights the unique benefits of the investment trust structure, which allows retail investors access to private equity returns with the liquidity of a public company. This structure has facilitated democratized access to private equity long before recent innovations, such as LTAFs, were introduced.


#PrivateEquity #ICGEnterpriseTrust #AlternativeInvestments #BuyoutInvesting #FundShack #InvestmentTrusts #PublicMarkets #DefensiveGrowth #LPInvesting #AlternativeAssets #PrivateEquityPodcast #RossButler #ColmWalsh #AssetManagement #ICG

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group

Karen Sands on the Fund Shack private equity podcast

The modern PE COO: how Federated Hermes drives value behind-the-scenes with Karen Sands

In this episode, Ross Butler talks to Karen Sands, COO of Federated Hermes Private Equity which manages some $6bn of AUM. Karen provides insight into Federated Hermes’ shift into private markets, their strategic focus on ESG, and her role in managing operations. They explore the importance of scalable infrastructure, the evolving investor landscape, and the operational challenges faced by private equity firms today.

Detailed Insights:

Federated Hermes and Private Markets:
Federated Hermes transitioned into private markets in 2018 when it acquired Hermes, positioning the firm to grow its ESG and private market offerings. Karen explains that while Federated Hermes had roots in mutual funds and money markets, the integration of Hermes has helped them expand into lower mid-market private equity.

The COO’s Role in Private Equity:
Karen highlights that, as COO, her responsibility extends beyond back-office functions. She collaborates closely with the investment and sales teams, ensuring infrastructure is aligned with investor needs, fund performance, and operational efficiency. The operational backbone is critical to delivering first-class service and maintaining investor trust.

Importance of Data-Driven Operations:
Karen emphasizes the need for a robust, scalable infrastructure. Federated Hermes uses a “target operating model” that integrates data from various systems, providing a comprehensive view of fund-level, asset-level, and investor-level information. This enables the firm to be nimble in responding to investor queries while maintaining efficiency.

Risk Management and Investor Relations:
Operational risk, liquidity management, and transparency are top priorities for Karen. She discusses the importance of having systems in place to handle investor demands, manage cash flow, and ensure the firm’s resilience against macroeconomic shocks like the recent Silicon Valley Bank incident.

Emotional Intelligence in Leadership:
While strong analytical skills are essential, Karen underscores the value of emotional intelligence and relationship-building in leading operational teams. For her, fostering diversity of thought and nurturing strong, empathetic leadership are key components of success.

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#PrivateEquity #FederatedHermes #PrivateMarkets #COOInsights #FundOperations #FundShack #ESGInvesting #ClientRelations #RiskManagement #PrivateCapital #OperationsManagement #privatemarkets #alternativeassets

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group

Joanna Asfour, Partners Group, Fund Shack podcast

How Partners Group is cracking the DC pension market in the UK, with Joanna Asfour

Founded in mid-1990s, Partners Group launched its first vehicle accessible to individual investors in the early naughties. Today it is at the frontline of the democratisation of private equity.

In this episode, Ross Butler speaks to Joanna Asfour, the firm’s global head of consultant relations, to discuss how private equity can help DC pensioners in the UK access private markets.

We look particularly at the benefits that private markets exposure can bring to a pension fund, as well as some of the complexities around the management of such less liquid investments. We al LTAFs, the UK equivalent of ELTIFs and the various nuances of providing relatively simple access to the asset class for DC pension trustees.

Top insight
The UK DC market will be worth about a trillion by 2030. It’s a £100bn opportunity for private markets. There’s been sub-£5bn invested so far.
i.e. This is going to be big!

Highlights

Historical Context and Current Position
Partners Group has been a pioneer in making private markets accessible to individual investors since the early 2000s. The firm currently manages around 150 billion euros in assets, with private wealth being a rapidly growing segment.

Democratization of Private Markets
The term democratization refers to broadening access beyond institutional investors to include individuals, such as DC pension scheme members and wealth management clients.
This trend is seen as mutualization, akin to what mutual funds did for public markets.

Regulatory and Operational Challenges
The key challenge has been the regulatory and operational barriers that limit DC pension schemes from investing in private markets.
The introduction of the Long-Term Asset Fund (LTAF) by the FCA has been crucial in providing a UK-authorized fund structure suitable for DC schemes.

LTAF as a Solution:
LTAFs are designed to meet the specific needs of DC pension schemes, allowing them to blend private markets into their default fund arrangements.
This structure addresses both regulatory requirements and the operational demands of life insurance platforms that manage many DC pension schemes.

Implementation Considerations:
Trustees need to consider where in the pension lifecycle private market allocations are most appropriate, particularly focusing on the growth accumulation phase.
There is a need to balance liquidity management and stress test the potential impact of including private markets in DC schemes.

Performance and Valuation:
Performance fees and daily valuations are critical aspects that need to be managed to ensure fair treatment of all investors in an evergreen fund format.
Partners Group has developed robust systems to handle daily valuations and liquidity management, drawing on their long experience with similar fund structures.

#privateequity #democratisation #fundraising #privatewealth #privatemarkets #LTAFs #alternativeassets

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell
katie@linearb.media
Linear B Group