Reuters says pension funds and other large investors are looking for ways to bypass PE funds and invest directly in companies, as well as continuing co-invest alongside private equity funds. The article suggests the main reason for the trend is that large pension funds and insurers are seeking to avoid the “large fees” associated investing through PE vehicles.
Limited partners (LP) who are taking this approach are still only making a minority of their total investments in direct deals or club deals.
Some of the LPs mentioned in the report are Hermes GPE, an investor with 20 percent its assets in co-investments, British insurer Legal & General, the Canada Pension Plan Investment Board (CPPIB), with about 10%, and the Ontario Teachers’ Pension Plan Board.
Elsewhere, pensionpulse noted that CPPIB’s newly appointed and well-regarded CEO, Mark Wiseman, has said private equity, real estate and infrastructure are a better fit for the long view and relatively risk-averse tastes of CPPIB. (Image Source: pensionpulse blog)