Interest In Private Markets Strong Among Institutional Investors

Public pension plans in the United States and the United Kingdom tracked by eVestment, the global leader in institutional investment data and analytics, announced 215 new private equity mandate awards in 4Q 2018 and a total of 954 for 2018. This puts private equity investments in the No. 1 spot for new allocations among these public pensions for the past year. Private equity held the top spot for new public pension mandates in 2017 as well, with a total of 580.

Q4 hedge fund letters, conference, scoops etc


FirmBee / Pixabay

The number of mandate awards was up substantially in 2018 compared to 2017. For the full year 2018, public plans monitored by eVestment announced 3,574 awards across a variety of asset classes, compared to 2,357 in 2017.

Interest In Private Markets

Public plan mandate data for the past two years, which is as long as eVestment has been tracking it, has shown a consistent appetite for private equity among public pensions, with private equity capturing 27% of all the mandates awarded in 2018 and 25% in 2017.

Direct investment in real estate among public pensions surged in 2Q and 3Q 2018 (with 160 and 138 investments respectively), but fell off in Q4 (at 103), landing real estate as the No. 3 most popular new investment option for public plans for full-year 2018, capturing 14% of new mandates.

For both 2018 and 2017, equity investments captured the second highest percentage of investments for those years, at 20% and 21% respectively.

One implication of public pensions’ increased interest in private equity and private markets investments is the higher level of transparency public pensions require, a level of transparency which may be new to many of these managers.

“Public pensions have a variety of stakeholders to whom they are accountable when making investments,” said eVestment Global Director of Insights John Molesphini. “As a result, private markets and other alternative managers looking to win public plan assets increasingly need to comply with transparency and disclosure standards they may be less familiar with to win these mandates.”

Technology tools can help make that sharing of information easier and more efficient. For instance, eVestment Private Markets solutions allow investors and private markets investment managers to easily and securely share information as those investors compare the variety of private markets investment opportunities available to them.

eVestment tracks public pension plan trends via the company’s Market Lens solution. Market Lens offers users a searchable platform that provides access to a mandate database for U.S. and United Kingdom public pension plans. Market Lens provides board documents, including manager presentations, consultant recommendations, video presentations, fee schedules, upcoming allocation changes, private markets plans and more. There are currently more than 40,000 documents housed on the Market Lens database.

Article by Mark Scott, eVestment

Saved Articles

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted for being a sophisticated and loyal reader.

Sign up for ValueWalkPremium today and get our exclusive content for 35% off.

Use coupon code vip19 or click on the button below

Limited time offer only ENDS 12/31/2019 or after next 25 subscribers take advantage whichever comes first – please do not share this discount with others