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How Principal Investors Can Up Their Game in Direct Private Equity
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How Principal Investors Can Up Their Game in Direct Private Equity

Markus Massi, Alessandro Scortecci and Bruno Freitas
Boston Consulting Group, 2018
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Editorial Rating

8

Qualities

  • Analytical
  • Overview
  • For Experts

Recommendation

According to research, private equity funds raised more than $3 trillion in capital from 2012 to 2017, with principal investors providing a large share of that money. Sovereign wealth funds, pension funds and family offices have taken note of private equity’s solid growth rates and returns. Consultants Markus Massi, Alessandro Scortecci and Bruno Freitas assess how principal investors can harness the potential of this asset class. Investors and money managers seeking information on private equity will appreciate this detailed report.

Summary

Principal investors are positioning capital in private equity at a rapid clip. Eyeing the sector’s compound annual growth rate of 8% from 2000 to 2017, principal investors have boosted their private equity allocations from 4% of their assets in 2000 to 14% in 2016. Private equity’s allure is its investment return, which at 16% in 2016 was substantially higher than those available from public equities and fixed income securities. Principal investors devoted only 60% of their portfolios to these traditional asset classes in 2016, down from roughly 90% in 2000.

About the Authors

Markus Massi, Alessandro Scortecci and Bruno Freitas are Boston Consulting Group professionals.

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