Chris Witkowsky
In this second episode of our miniseries Private Markets and the End of Cheap Money, we talk to LPs about allocation shifts, impacts on fundraising and what investors are looking for out of their GPs as rates rise.
Scott Ramsower, head of private equity funds at Teacher Retirement System of Texas, tells us why the public pension fund is leaning into partnerships and spending more time on due diligence.
Ramsower’s perch affords him a broad view of the industry, and he sat down to chat with Buyouts about challenges in the current market.
The move comes as New Jersey and other public systems struggle to retain private equity talent in the face of generally higher compensation in the private sector.
Information asymmetry is growing as more administrative costs are being shifted away from the management fee and directly charged to LPs as expenses.
The SEC is exploring potential rulemaking around GPs’ disclosure of fees, expenses and conflicts, the chairman said last month.
The SEC under President Biden is expected to take a more aggressive role in regulating and punishing bad practices across corporate America, including private equity.
Firms like Thoma Bravo have capitalised on the growing opportunity for deals and LP desire to tap into the frantic growth of the tech sector.
The hope is that the transition remains amiable and smooth, in which case the existing GP will retain economic rights.
LPs appear to want to appoint a new manager to keep the portfolio running because the investments have performed well so far.
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