Pension funds are opting for “strategic” investing, which often involves co-investment and direct investment, in a bid to cut fees. As institutional
investors becomes more creative, private equity managers could stand to
lose out. Strategic investing has moved from rhetoric about private credit to opportunities in private equity.
This creativity, and careful consideration of strength and resources, could
be detrimental to private equity managers, Sean Gill, director of private
markets research at NEPC, told Fundmap. A lot of pension funds have begun whittling down their portfolio and selling private equity assets to
focus on core managers. Others, that have the power of scale, have begun
going direct, or are at least considering direct investments.