Chart of the Week: US institutions moving towards separate accounts

Separate Accounts becoming more popular with North American institutions

In the first ten months of 2013, a total of $5.34 billion has been collected from 20 separate accounts in North America. The Neuberger Berman / Texas Permanent School Fund Separate Account (2nd Tranche) is the largest separate account to close so far this year at $900 million. By contrast, only $2.36 billion was raised in total between 2011 and 2012. The Blackstone / New Jersey Division of Investment Tactical Opportunities Account was the largest separate account to close in this period, raising $750 million.

The Blackstone Group has been very active with its separate account programmes, closing three relationships in the first ten months of this year. Blackstone’s separate accounts tend to be tactical and opportunistic multi-asset vehicles. Examples include Blackstone Alternative Asset Management Separate Account and Blackstone/Oregon State Treasury Tactical Opportunities Separate Account raising $500 million and $250 million respectively.

PEI’s private equity investor sentiment survey, conducted earlier this year, revealed that 30 percent of LPs would target separate accounts in the coming year. Investors – particularly at the larger end of the scale – like these customised investments due to the opportunity they give or lower fees and better terms and conditions.