Giving investors what they need

Why join Siguler Guff as a managing director?

I’ve known George Siguler for at least 15 years and we had something of a meeting of minds. I have always admired the firm and the forward-thinking that it does. Rather than offering just generalist funds of funds they look at opportunities and inefficiencies.

PEI understands your new role may entail work on separate accounts?

We are going to take the lead from investors in terms of what they need for their private equity programme and ask, ‘Can we deliver it through my experience and the experience of the firm? Can we custom-make a product for them?’ The product will be something more custom-made than boilerplate.

Siguler Guff has a long-established presence in Russia via its subsidiary, Russia Partners. What is you view of the Russian market?

I am not an expert on the Russian market, but what I saw in my first visit to Moscow last year was impressive. It is definitely a great market and on an opportunistic basis one can make money. In private equity to simply say, ‘I like this market’, go in there and dump money on it is not the right approach. You have to have the right locals in the market with patience and the knowledge. If you use Western standards of due diligence and investment strategies, you can definitely make money.

What about China? Is it really the epicentre of global private equity activity today?

I have always considered China to be a very opportune place. Like everything else, what worries me about China is the amount of money that is being dumped into private equity in that market for people to invest.
I worry about that: will China have a hiccup in the same way as the mega buyout funds had? It’s a very attractive place if you stick to the right manager, who sticks to the right philosophy and doesn’t just raise money because they can.

Are funds of funds becoming more important?

It’s not so much that they are becoming more or less important, but their role must change. I think many, if not most, LPs who have invested in funds of funds in the past are now saying they want a more active approach. Access used to be a big selling point for funds of funds, now it is more a case of what added value you can show.

What predictions do you have for 2010?

I think we are going to be seeing a slower recovery than people expect. A lot of people stayed on the sidelines during the crisis and when they saw the market come back in 2009 they thought, ‘Shucks! I didn’t put enough money out.’ So people are going to be putting money to work thinking that wherever they put it, they will make money in 2010 – I think that is a mistake. You need to be very opportunistic to make money in 2010.