Private Equity
Our platform provides access to private equity funds that directly invest in privately held companies. The ownership period for these funds is typically 8 to 10 years and most funds offer no immediate liquidity feature. Historically, private equity funds have generated long-term returns significantly higher than broad stock market indices. This being the reason many endowments and pension funds are willing to commit above average allocations to this unique asset class. In addition, many of the larger private equity funds are broadly diversified providing an added level of protection against downside risk.
Through strategic relationships established with various investment firms, we have the ability to access private equity investments from some of the nation’s largest and most respected firms, such as Blackstone, Goldman Sachs, Apollo, Carlyle, TPG, and KKR. In addition, we also have a few arrangements with smaller niche-oriented private equity firms who specialize in specific industry groups, such as Healthcare.
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Private Credit
Since the global financial crisis of 2008, corporations (mostly small and mid-sized) have not been able to borrow from commercial banks in the same traditional methods as before. In recent years, private investment firms have stepped-in to meet this demand and lend money to these corporations. These firms are typically lending to middle market sized corporations and are usually based on a floating interest rate loan that is secured against the assets of the corporation.
These private investment firms can also secure additional capital for these loans and can utilize a modest amount of leverage to enhance the returns of the portfolio. Unlike traditional bond funds, private credit funds have a much lower level of price volatility since the loans in the portfolio are not interest rate sensitive. The typical rate of returns on these private credit funds is between 8 and 11%. In the current low interest rate environment, these funds have become more attractive to pension funds and endowments. These institutions view private credit as a good complement to a traditional fixed income portfolio.
We have access private credit funds from some of the largest and most well-established firms in this space, such as PIMCO, Goldman Sachs, Ares, Blackstone / GSO, Owl Rock, and Monroe Capital.
Private Real Estate
Platform also provides investors access to the full spectrum of commercial private real estate investing. There are four main strategies for private real estate investing:
Core
Core Plus
Value-Add
Opportunistic
Core and Core-Plus are the more conservative strategies of owning commercial private real estate. These types of properties are already developed and are fully in commerce. Most Core and Core-Plus funds own income producing properties with low to moderate levels of debt. Investments into Core / Core-Plus funds are usually the first level of entry by endowments and pension funds. The industry standard index used by institutions to monitor the performance of Core private real estate ownership is the NFI ODCE index. Since the index inception in 1978, it has only generated negative annual returns four times.
Value-Add and Opportunistic Properties
This category represents properties that are being renovated, redeveloped, or developed from the ground up. These types of properties may have little or no cash flow immediately (unlike Core investments), but they will during the latter phases. A much larger portion of the return is from price appreciation and not yield.
Private Real Estate Liquidity
Core and Core-Plus investments offer better liquidity for investors than Value-Add or Opportunistic investments. In recent years, many major institutional private real estate firms have created funds which offer monthly or quarterly liquidity windows for investors. Thus, making illiquidity of private real estate less of an issue for most investors.
We predominantly work with well-established private real estate firms who historically have catered to institutional investors. Firms include Blackstone, Starwood, Jones Lange LaSalle, Oaktree, Nuveen, Clarion Partners, Greystar, Origin Investing, and Sovereign Partners.