Latest news with #LTAF
News24
22-06-2025
- Business
- News24
Private assets are on the rise - what you need to know
While private investors currently allocate only up to 5% of their portfolios to private markets, Nathalie Krekis anticipates that the gap with institutional investors will narrow significantly over time and private markets will become commonplace. Over the next few years, individual investors are expected to increase their allocation to private markets, in some cases potentially approaching levels seen by various types of institutional investors. The compelling return history for private market investment is clearly a key motivator for these allocations. Schroders Capital research shows this is the main reason institutional investors enter private markets, and we have no reason to believe individual investors think any differently. Over the past five years, smaller clients have also been offered more options to invest in private markets thanks to product development, changing regulations and technological advancements. New regulated fund structures such as the long-term asset fund (LTAF) in the UK, the European long-term investment fund (ELTIF) in Europe and UCI part II have been a game changer for accessing private markets, as well as for the increased use and further development of evergreen open-ended funds. While promoting access to private markets with these new structures, regulators around the world have also been tightening rules to protect smaller investors. For example, in the UK, clients must confirm they meet certain investment criteria, undergo a suitability review by their financial advisor, and have a 24-hour cooling-off period to reconsider their decisions. The South African regulator requires investors to meet the criteria of a qualified investor as per the definition in section 96(1)(a) of the South African Companies Act, No. 71 or 2008 as amended, and/or to have a minimum of R1 million to invest in terms of section 96(1)(b) of the South African Companies Act. Bain & Company estimates that by 2032, 30% of global assets under management could be allocated to alternatives, with a large chunk in private assets. While private investors currently allocate only up to 5% of their portfolios to private markets, we anticipate that the gap with institutional investors will narrow significantly over time and private markets will become commonplace. The growing appeal of private markets Of course, returns aren't the only reason to use private assets, even if it's high on the client agenda. Characteristics like stable income and genuine diversification, which have the potential to significantly enhance overall portfolio resilience, add to the appeal. It is also about the opportunity set. In public markets, there is an increasing concentration of stocks, with more than 30% of the S&P 500 dominated by just a handful of companies, leading to a narrower range of options. In contrast, the number of private companies, and those staying private for longer, continues to grow. Private companies in the US with revenues of $250 million or more now account for 86% of the total. Additionally, the number of public listings in the US has more than halved over the past 20 years compared to the period from 1980 to 1999, highlighting the shift towards private market opportunities (see chart below). In South Africa, the last five years have seen an average of 24 companies delist from local stock exchanges on an annual basis although 2024 showed a significant slowdown in this rate as only 11 companies exited the public market. The Johannesburg Stock Exchange is also highly concentrated with a few large companies dominating the index. And it's not just a matter of numbers. Private companies tend to be more agile and innovative in their operations compared to public companies, and they can access opportunities in sectors where public companies have limited or no reach. For example, the new US tariff policies are likely to affect both public and private companies, particularly those vulnerable to supply chain disruptions. However, private companies tend to be more flexible in restructuring their supply chains to adapt to these changes, potentially avoiding cost increases. Nevertheless, companies heavily impacted may still face higher costs, affecting profitability, and therefore valuations and deals. Public markets continue to shrink, and companies are staying private for longer Once the decision to allocate to the asset class has been made – what next? How do investors actually start their private assets journey, and what can they expect the journey to look like? Pacing is different One of the key differences with private asset investment is in the pacing of capital deployment. With no immediate secondary market to provide liquidity, allocations can and should be structured to, in a sense, create their own liquidity. Structured correctly, private asset allocations can become 'self-sustaining' over time, with distributions and income funding new investments to maintain a target allocation. What does that mean in practice? Many fund managers, or general partners (GPs), raise capital every year in what are known as 'vintages'. Each vintage represents a discrete fund that has an investment phase and a harvesting phase. The investment phase is when the capital is put to work, typically over a period of about 3-5 years depending on which part of the private assets market it's in, and what the market backdrop is like. The harvesting phase is when the invested assets are exited, generating capital that can be distributed back to investors. This is typically around 5-7 years after the investment is first made in what is known as an 'exit'. Private equity managers will use the term 'exits' because, while selling an asset is an option, it's only one of many options available. The routes to exit are varied but most commonly the company is either floated in an IPO (initial public offering), sold to another corporate buyer or private equity investor, or sold into a continuation vehicle. In private debt, the fund managers (there is often a cohort of lenders) will structure lending in such a way that the capital is returned at the end of a defined timeframe, having received the cashflows. These cashflows can then be used to refinance ('re-up' is a term often used) subsequent vintages. In recent years new exit routes have emerged, especially in the secondary market with the continuation vehicles mentioned above . That's because these deals allow the GPs to provide a liquidity mechanism to their existing investors, the limited partners (LPs), while at the same time holding onto key assets for longer to maximise value. Continuation funds have evolved to become a common strategy for GPs to hold onto high-performing assets, or pools of assets, beyond the life of the original fund. Vintage years, consistent deployment and the impact on returns A vintage year allocation approach has the benefit of mitigating the risk associated with market timing. Despite our optimism for the mid- to long-term outlook for private assets, the near term is undoubtedly going to be challenging for many investors, and keeping up a steady investment pace may be difficult. While exit and fundraising activity seemed to have bottomed out in 2024 following a prolonged slowdown since 2022, risks and uncertainty in markets have increased sharply since the start of the year. As we pointed out above, this is mainly due to the uncertainties caused by the US government policy changes and the impacts these may have on economies and markets. In addition to broader concerns over performance, when markets fall, some investors face the 'denominator effect'. Private assets tend to correct less than other more liquid asset classes due to the way they are valued, so their relative weight in an investor's portfolio tends to increase when markets fall sharply. This can limit investors' ability to make new investments into the asset class and maintain a determined percentage allocation. Nevertheless, research suggests investors don't have to shy away from new investments in periods of crisis or recession. A recent analysis from Schroders Capital shows that private equity consistently outperformed listed markets during the largest market crises of the past 25 years. Despite challenges such as high interest rates, inflation, and economic volatility, private equity outperformed public markets and experienced smaller drawdowns, with distributions becoming less volatile over time. Meanwhile, recession years tend to yield vintages that perform exceptionally well. Structurally, funds can benefit from 'time diversification', where capital is deployed over several years, rather than all in one go. This allows funds raised in recession years to pick up assets at depressed values as the recession plays out. The assets can then pursue an exit later on, in the recovery phase, when valuations are rising. For example, our analysis shows that the average internal rate of return ('IRR') of private equity funds raised in a recession year has been higher than for funds raised in the years in the run up to a recession – which, at the time, probably felt like much happier times. For private debt and real estate, there are similar effects. For infrastructure, the effects should also show a similar pattern; however, longer-term data is limited in this part of the asset class. Private equity vintage performance (average of median net IRRs) Appropriate allocations to private assets will, of course, vary by client and will always be led by overall suitability. Important factors such as a client's overall income and expenditure, time horizon, investment understanding/experience, appetite for borrowing and ability to tolerate illiquidity are all factors we consider when deciding on the exposure to private assets. For the sake of illustration though, let us assume all individual clients fall within one of four risk brackets: cautious, balanced, growth and aggressive. What would the investment pacing look like for the private asset allocation? For a client on a growth risk mandate (this would mean a typical exposure to equities of between 50-80%) who has a good understanding of investments – a target allocation of 20% might be appropriate across private debt, private equity and real estate. How private assets could fit within a portfolio It's important to note that the nature of investing in private assets means that allocations should be built up over time to ensure vintage diversification, and that we explicitly recommend diversification by investment and vintage. While we want to diversify by asset class, we also suggest spreading investments across a range of structures. This usually depends on the investable assets and the investor's ability to accept illiquidity, noting that private investors could benefit from different structure types. For example, clients with large investable asset bases and that have the ability to lock up their money for 10 years plus, can use the traditional routes, such as closed-ended structures. Otherwise, clients with lower minimum entry points and with an uncertain time horizon are able to use 'evergreen' open-ended funds: these funds do not have a pre-determined lifespan and can run in perpetuity, recycling investment proceeds and raising new capital as required. While clients investing in evergreen funds are able to access their money periodically, they need to understand these are still long-term commitments and that there are established limits and rules on when and how much they can withdraw. It's important that investors be educated and prepared for their allocation to be left untouched for an extended period. Private equity funds typically run for at least seven years, during which time the allocation will not be liquid. The realisation of the assets will also take several years, tapering down in the same way the allocation is gradually ramped up. Nathalie Krekis, portfolio director, Cazenove Capital, part of the Schroders Group News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24. Disclaimer: News24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, News24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
Business Wire
04-06-2025
- Business
- Business Wire
The 'Retail Revolution' Will Drive 50%+ of Private Market Flows by 2027 – State Street Private Markets Survey
BOSTON--(BUSINESS WIRE)--State Street Corporation (NYSE: STT) today launched its global Private Markets Survey Report 'The New Private Markets Advantage'. The democratisation of private markets is a trend that has been underway for a number of years; however, 2025 has the potential to be a watershed year for retail allocations to private markets. Among the key takeaways, Institutional investors are anticipating a significant uptick in retail allocations to private markets in the next two years, with retail investors set to become the main source of private market fundraising in this period, according to the latest iteration of State Street's private markets research. 1 The survey of 500 institutional investors, including traditional asset managers, private markets managers and asset owners across North America, Europe, the Middle East and Asia-Pacific, finds that the majority of respondents (56%) now believe at least half of private market flows will come through semi-liquid, retail-style vehicles marketed to individuals within 1-2 years. Product innovation in the semi-liquid fund space is the most recognised enabler of this 'retail revolution', cited by 44% of respondents globally as the best means for driving the democratisation of private markets. Recent examples range from the launch of pioneering funds like private asset ETFs to structural innovations such as the UK's LTAF and EU's ELTIF 2.0 rules. Notably, such innovation ranked slightly lower (37%) among North American respondents, whose primary response was 'lowering means-based barriers to entry' (44%), such as wealth or income minimum thresholds. More than two in five (22%) respondents believe retail-style vehicles will be the main fundraising mechanism for private markets, up considerably from 14% last year. While enhanced appetite from retail investors is in part driving this demand, a drop-off in expectations for traditional fundraising from institutional investors is also contributing: just 39% of respondents now expect traditional fundraising to account for most flows, down from 51% last year. Donna Milrod, chief product officer and head of Digital Asset Solutions at State Street, commented: The democratisation of private markets is a trend that has been underway for a number of years; however, 2025 has the potential to be a watershed year for retail allocations to private markets. Distribution to wealth channels and retail fund flows could become the dominant contributor to future fundraising. Against this backdrop, we are pleased to see respondents recognising the critical role that innovative fund products and structures are playing in fuelling and enhancing this trend as distribution broadens from institutional to mass affluent to retail over the coming years.' 'Flight to quality' now entrenched in investment strategies, as anticipated rate of private markets growth slows This year's findings support indications from earlier State Street research that the higher interest rate environment which began in the early 2020s has led to a growing focus on due diligence and risk/return assessments among investors, which has in turn prompted a pivot away from riskier private assets and towards a smaller pool of high-quality options. 2 Overall, LPs and GPs both predict a private/public split of 42%/58% in their (or their clients') portfolios within 3-5 years' time, which represents a slight increase in their respective current allocations of 39%/61% (LPs) and 38%/62% (GPs). At the same time, the 2025 data reveals a year-on-year shift in capital allocation plans from emerging to developed markets. Developed Europe saw a significant jump in interest, with 63% of LPs now planning investments in the region over the next two years (up from 43% last year), while other developed markets remained largely steady. Emerging APAC has seen the biggest decline in forecasted appetite, with just 14% of LPs planning to invest there (down from 25% last year), while emerging Europe dropped to 18% from 21%. The Middle East and Africa also declined significantly, albeit from low bases. State Street contends that this preference for developed markets, in conjunction with more modest growth in allocations, constitutes a flight to quality (or flight from risk) in institutions' private markets strategies. Scott Carpenter, global head of Alternatives at State Street, commented: 'Private markets remain on a robust growth trajectory, though the pace of expansion as a share of portfolios has moderated from the exceptional levels seen pre-2024. The renewed macroeconomic uncertainty linked to US trade policy, following so immediately from the inflation shock of the pandemic years, is only likely to encourage institutions to be even more selective about how they allocate.' Geopolitical uncertainty complicates the outlook for private market assets and retail-style products State Street's study highlights that the current geopolitical uncertainty surrounding international trade relationships could support private markets. The smoother, less volatile returns typically delivered by private market assets are a key part of their appeal, cited by around a quarter of respondents as their reason for increasing allocations to private equity (22%) and infrastructure (26%), while as many as 42% said the same for private credit. However, the report underlines that trade-related uncertainty is likely to distort the definition of 'quality' in ways specific to the economic environment that ends up occurring. As an example, when polled prior to 'Liberation Day', respondents across all regions and across all private market asset classes said that they expected to find the most investment opportunities in North America over the next two years. In contrast, State Street's research now notes, among other hypotheticals, a scenario whereby non-US countries and blocs could take steps to increase trade volumes with one another, rather than with the US. In this dynamic, State Street posits private markets investments in companies with reduced US exposure would benefit, rather than US assets. The outlook for 'quality' private market assets is therefore significantly clouded by the current environment. Further to this, State Street recognizes that economic disruption complicates the development pathway for the new retail-style private market products. On one hand, policymakers may have to prioritize other economic policy challenges over the reforms required to facilitate the development of these funds. Compounding this, if the underlying assets in retail-style products lose value for a prolonged period, individual investors may negatively associate the funds with the broader macroeconomic environment, reducing demand for the funds. On the other hand, the research says, in a period of restrictive economic conditions and fiscal tightening, governments may come to see retail flows as a way to increase funding to their domestic priorities (e.g. defence). Such a shift may prompt greater legislative and regulatory attention on the reforms needed to develop retail-style products, suggests State Street. AI integration key to the success of institutions' private markets operations As demand for private assets grows, institutions are increasingly recognising the value of Generative AI and Large Language Models (LLMs) in enhancing their private markets operations. While in last year's survey only 58% of those surveyed said they saw the value in the technology, 83% are now planning out cases for the technology to generate analysable data out of unstructured private markets information from their operations. Correspondingly, planned technology expenditure is up for the overwhelming majority (69%) of respondents. While GPs and LPs identified a broad range of use cases for these innovations, from analysing company reports to distributions, loan agreement documents, purchase/sale documentation and sustainability information, performance analysis is where most said the technology would prove 'most useful', both at a portfolio level and for individual holdings. Around a third of respondents (34%) agreed that technology development enabling more frequent, timely and high-quality data is an essential factor in making private markets accessible to a wide range of individual investors, while 37% also called on governments and regulators to mandate private companies to give more and better data to their investors. Chris Rowland, head of Custody, Digital and Fund Services Product: 'We believe that portfolio liquidity starts with data liquidity. This year's results show that institutions are moving from hypothetical to real implementation of AI-based solutions in their private markets operations, and those at the forefront of this innovation will gain a significant advantage.' Please click here to download the 2025 Private Markets Research Report. 1 The study, commissioned by State Street and conducted by CoreData Research, surveyed 500 respondents from buyside investment institutions including private markets specialist managers, generalist asset managers with private markets portfolios, and institutional asset owners across four regions, North America, Europe, the Middle East and Asia-Pacific, in Q1 2025. 2 2024 Private Markets Outlook: An analysis of capital distribution and fundraising in global private markets About State Street Corporation State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $46.7 trillion in assets under custody and/or administration and $4.7 trillion* in assets under management as of March 31, 2025, State Street operates globally in more than 100 geographic markets and employs approximately 53,000 worldwide. For more information, visit State Street's website at *Assets under management as of March 31, 2025 includes approximately $106 billion of assets with respect to SPDR® products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. © 2025 State Street Corporation
IOL News
28-05-2025
- Business
- IOL News
Understanding private assets: a guide for new investors
Explore the growing trend of private assets in investment portfolios, understand the benefits and risks, and learn how to navigate this evolving market as an individual investor. Image: File Over the next few years, individual investors are expected to increase their allocation to private markets, in some cases potentially approaching levels seen by various types of institutional investors. The compelling return history for private market investment is clearly a key motivator for these allocations. Schroders Capital research shows this is the main reason institutional investors enter private markets, and we have no reason to believe individual investors think any differently. Over the past five years, smaller clients have also been offered more options to invest in private markets thanks to product development, changing regulations, and technological advancements. New regulated fund structures such as the long-term asset fund (LTAF) in the UK, the European long-term investment fund (ELTIF) in Europe, and UCI Part II have been a game changer for accessing private markets, as well as for the increased use and further development of evergreen open-ended funds. While promoting access to private markets with these new structures, regulators around the world have also been tightening rules to protect smaller investors. For example, in the UK, clients must confirm they meet certain investment criteria, undergo a suitability review by their financial advisor, and have a 24-hour cooling-off period to reconsider their decisions. The South African regulator requires investors to meet the criteria of a qualified investor as per the definition in section 96(1)(a) of the South African Companies Act, No. 71 or 2008 as amended, and/or to have a minimum of R1 million to invest in terms of section 96(1)(b) of the South African Companies Act. Bain & Company estimates that by 2032, 30% of global assets under management could be allocated to alternatives, with a large chunk in private assets. While private investors currently allocate only up to 5% of their portfolios to private markets, we anticipate that the gap with institutional investors will narrow significantly over time, and private markets will become commonplace. The growing appeal of private markets Of course, returns aren't the only reason to use private assets, even if it's high on the client's agenda. Characteristics like stable income and genuine diversification, which have the potential to significantly enhance overall portfolio resilience, add to the appeal. It is also about the opportunity set. In public markets, there is an increasing concentration of stocks, with more than 30% of the S&P 500 dominated by just a handful of companies, leading to a narrower range of options. In contrast, the number of private companies, and those staying private for longer, continues to grow. Private companies in the US with revenues of $250 million or more now account for 86% of the total. Additionally, the number of public listings in the US has more than halved over the past 20 years compared to the period from 1980 to 1999, highlighting the shift towards private market opportunities (see chart). In South Africa, the last five years have seen an average of 24 companies delist from local stock exchanges on an annual basis, although 2024 showed a significant slowdown in this rate as only 11 companies exited the public market. The Johannesburg Stock Exchange is also highly concentrated, with a few large companies dominating the index. And it's not just a matter of numbers. Private companies tend to be more agile and innovative in their operations compared to public companies, and they can access opportunities in sectors where public companies have limited or no reach. For example, the new US tariff policies are likely to affect both public and private companies, particularly those vulnerable to supply chain disruptions. However, private companies tend to be more flexible in restructuring their supply chains to adapt to these changes, potentially avoiding cost increases. Nevertheless, companies heavily impacted may still face higher costs, affecting profitability, and therefore valuations and deals. Public markets continue to shrink, and companies are staying private for longer Number of public listings per annum in the US vs PE-backed. Image: Supplied. Once the decision to allocate to the asset class has been made, what is next? How do investors actually start their private assets journey, and what can they expect the journey to look like? Pacing is different One of the key differences with private asset investment is in the pacing of capital deployment. With no immediate secondary market to provide liquidity, allocations can and should be structured to, in a sense, create their own liquidity. Structured correctly, private asset allocations can become 'self-sustaining' over time, with distributions and income funding new investments to maintain a target allocation. What does that mean in practice? Many fund managers, or general partners (GPs), raise capital every year in what is known as 'vintages'. Each vintage represents a discrete fund that has an investment phase and a harvesting phase. The investment phase is when the capital is put to work, typically for about 3-5 years, depending on which part of the private assets market it's in, and what the market backdrop is like. The harvesting phase is when the invested assets are exited, generating capital that can be distributed back to investors. This is typically around 5-7 years after the investment is first made in what is known as an 'exit'. Private equity managers will use the term 'exits' because, while selling an asset is an option, it's only one of many options available. The routes to exit are varied but most commonly the company is either floated in an IPO (initial public offering), sold to another corporate buyer or private equity investor, or sold into a continuation vehicle. In private debt, the fund managers (there is often a cohort of lenders) will structure lending in such a way that the capital is returned at the end of a defined timeframe, having received the cashflows. These cashflows can then be used to refinance ('re-up' is a term often used) subsequent vintages. Private assets portfolio becomes self-financing after 5-7 years Private assets portfolio becomes self-financing after 5-7 years. Image: Supplied. In recent years, new exit routes have emerged, especially in the secondary market, with the continuation vehicles mentioned above. That's because these deals allow the GPs to provide a liquidity mechanism to their existing investors, the limited partners (LPs), while at the same time holding onto key assets for longer to maximise value. Continuation funds have evolved to become a common strategy for GPs to hold onto high-performing assets, or pools of assets, beyond the life of the original fund. Vintage years, consistent deployment, and the impact on returns A vintage year allocation approach has the benefit of mitigating the risk associated with market timing. Despite our optimism for the mid-to-long-term outlook for private assets, the near term is undoubtedly going to be challenging for many investors, and keeping up a steady investment pace may be difficult. While exit and fundraising activity seemed to have bottomed out in 2024 following a prolonged slowdown since 2022, risks and uncertainty in markets have increased sharply since the start of the year. As we pointed out above, this is mainly due to the uncertainties caused by the US government policy changes and the impacts these may have on economies and markets. In addition to broader concerns over performance, when markets fall, some investors face the 'denominator effect'. Private assets tend to correct less than other more liquid asset classes due to the way they are valued, so their relative weight in an investor's portfolio tends to increase when markets fall sharply. This can limit investors' ability to make new investments into the asset class and maintain a determined percentage allocation. Nevertheless, research suggests investors don't have to shy away from new investments in periods of crisis or recession. A recent analysis from Schroders Capital shows that private equity consistently outperformed listed markets during the largest market crises of the past 25 years. Despite challenges such as high interest rates, inflation, and economic volatility, private equity outperformed public markets and experienced smaller drawdowns, with distributions becoming less volatile over time. Meanwhile, recession years tend to yield vintages that perform exceptionally well. Structurally, funds can benefit from 'time diversification', where capital is deployed over several years, rather than all in one go. This allows funds raised in recession years to pick up assets at depressed values as the recession plays out. The assets can then pursue an exit later on, in the recovery phase, when valuations are rising. For example, our analysis shows that the average internal rate of return ('IRR') of private equity funds raised in a recession year has been higher than for funds raised in the years in the run-up to a recession, which, at the time, probably felt like much happier times. For private debt and real estate, there are similar effects. For infrastructure, the effects should also show a similar pattern; however, longer-term data is limited in this part of the asset class. Private equity vintage performance (average of median net IRRs) Private equity vintage performance (average of median net IRRs). Image: Supplied. Past performance is not a guide to future performance and may not be repeated. Source: Preqin, Schroders Capital, 2022. There are 9,834 funds in the Preqin database. Only funds with vintage years after 1980 and 2017 are analysed. 220 funds that were out of distribution were excluded, reducing the number of funds in our universe to 3,400. Private equity-only investments, venture debt, and funds of fund strategies have been excluded. Pacing illustration for an investor Appropriate allocations to private assets will, of course, vary by client and will always be led by overall suitability. Important factors such as a client's overall income and expenditure, time horizon, investment understanding/experience, appetite for borrowing, and ability to tolerate illiquidity are all factors we consider when deciding on exposure to private assets. For the sake of illustration, though, let us assume all individual clients fall within one of four risk brackets: cautious, balanced, growth, and aggressive. What would the investment pacing look like for the private asset allocation? For a client on a growth risk mandate (this would mean a typical exposure to equities of between 50-80%) who has a good understanding of investments, a target allocation of 20% might be appropriate across private debt, private equity, and real estate. How private assets could fit within a portfolio How private assets could fit within a portfolio. Image: Supplied. It's important to note that the nature of investing in private assets means that allocations should be built up over time to ensure vintage diversification and that we explicitly recommend diversification by investment and vintage. While we want to diversify by asset class, we also suggest spreading investments across a range of structures. This usually depends on the investable assets and the investor's ability to accept illiquidity, noting that private investors could benefit from different structure types. For example, clients with large investable asset bases that have the ability to lock up their money for 10 years plus, can use the traditional routes, such as closed-ended structures. Otherwise, clients with lower minimum entry points and with an uncertain time horizon are able to use 'evergreen' open-ended funds: these funds do not have a pre-determined lifespan and can run in perpetuity, recycling investment proceeds and raising new capital as required. While clients investing in evergreen funds are able to access their money periodically, they need to understand these are still long-term commitments and that there are established limits and rules on when and how much they can withdraw. It's important that investors be educated and prepared for their allocation to be left untouched for an extended period. Private equity funds typically run for at least seven years, during which time the allocation will not be liquid. The realisation of the assets will also take several years, tapering down in the same way the allocation is gradually ramped up. This is why a complete, ongoing understanding of a client's overall financial position is crucial when considering building a private assets allocation. Private Assets - Investment risk: Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. Investors should only invest in private assets (and other illiquid and high-risk assets) if they are prepared and have the ability to sustain a total loss of their investment. No representation has been or can be made as to the future performance of these investments. Whilst investment in private assets can offer the potential of higher than average returns, it also involves a corresponding higher degree of risk and is only considered appropriate for sophisticated investors who can understand, evaluate, and afford to take that risk. Private Assets are more illiquid than other types of investments. Any secondary market tends to be very limited. Investors may well not be able to realise their investment before the relevant exit dates. * Krekis is a portfolio director at Cazenove Capital, part of the Schroders Group. PERSONAL FINANCE
Yahoo
08-05-2025
- Business
- Yahoo
Partners Group Selects Northern Trust to Support its Private Credit-Focused Long Term Asset Fund (LTAF)
Providing Fund Administration, Depositary and Banking Services for Partners Group's First LTAF LONDON, May 08, 2025--(BUSINESS WIRE)--Northern Trust (Nasdaq: NTRS) announces that it is providing Partners Group (SIX Swiss Exchange: PGHN) with fund administration, depositary, and banking services for its first LTAF, launched in April 2025. Founded in 1996 and based in Switzerland, Partners Group is one of the largest firms in the private markets industry with over US$150 billion of assets under management (as of 31 December 2024). It seeks to generate strong returns by identifying attractive investment themes and transforming businesses and assets into market leaders. The firm's investment programs and custom mandates span private equity, private credit, infrastructure, real estate, and royalties. Its new LTAF, the Partners Group Generations Private Credit LTAF, focuses on providing defined contribution (DC) pension funds and other professional investors with access to a diverse range of private credit investment opportunities. The United Kingdom (UK)'s LTAF regime came into existence in 2021, followed in 2023 by new rules widening its availability to provide a broad range of investors with increased access to private markets. Northern Trust also supported the launch of Partners Group's European Long Term Investment Fund (ELTIF)-compliant Private Equity ELTIF Evergreen Fund in 2024. Laurence Everitt, head of Global Fund Services, UK, at Northern Trust, said. "We are delighted to develop our relationship with Partners Group by supporting its first LTAF. At Northern Trust we continue to see significant interest in use of this UK vehicle for distributing investment strategies and have the operating model and servicing expertise – across illiquid, semi-liquid and traditional assets – to support asset managers as they expand their offering for investors." Northern Trust provides a complete set of services including fund administration, global custody, investment operations outsourcing and data solutions to global investment managers – supporting a range of complex investment strategies across the full spectrum of asset classes. About Northern Trust Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2025, Northern Trust had assets under custody/administration of US$16.9 trillion, and assets under management of US$1.6 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.
Business Wire
08-05-2025
- Business
- Business Wire
Partners Group Selects Northern Trust to Support its Private Credit-Focused Long Term Asset Fund (LTAF)
LONDON--(BUSINESS WIRE)--Northern Trust (Nasdaq: NTRS) announces that it is providing Partners Group (SIX Swiss Exchange: PGHN) with fund administration, depositary, and banking services for its first LTAF, launched in April 2025. Founded in 1996 and based in Switzerland, Partners Group is one of the largest firms in the private markets industry with over US$150 billion of assets under management (as of 31 December 2024). It seeks to generate strong returns by identifying attractive investment themes and transforming businesses and assets into market leaders. The firm's investment programs and custom mandates span private equity, private credit, infrastructure, real estate, and royalties. Its new LTAF, the Partners Group Generations Private Credit LTAF, focuses on providing defined contribution (DC) pension funds and other professional investors with access to a diverse range of private credit investment opportunities. The United Kingdom (UK)'s LTAF regime came into existence in 2021, followed in 2023 by new rules widening its availability to provide a broad range of investors with increased access to private markets. Northern Trust also supported the launch of Partners Group's European Long Term Investment Fund (ELTIF)-compliant Private Equity ELTIF Evergreen Fund in 2024. Laurence Everitt, head of Global Fund Services, UK, at Northern Trust, said. 'We are delighted to develop our relationship with Partners Group by supporting its first LTAF. At Northern Trust we continue to see significant interest in use of this UK vehicle for distributing investment strategies and have the operating model and servicing expertise – across illiquid, semi-liquid and traditional assets – to support asset managers as they expand their offering for investors.' Northern Trust provides a complete set of services including fund administration, global custody, investment operations outsourcing and data solutions to global investment managers – supporting a range of complex investment strategies across the full spectrum of asset classes. About Northern Trust Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2025, Northern Trust had assets under custody/administration of US$16.9 trillion, and assets under management of US$1.6 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn. Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at
