Inside an asset class

With $5bn of funds under management and relationships with 480 private equity firms, Pantheon has got to know the private equity markets well.

PrivateEquityOnline sat down with Carol Kennedy, Director of Strategic Development at Pantheon, one of the largest and best-established private equity fund-of-fund investors, to talk in more detail about investing in private equity.

Carol had recently chaired the investor panel discussion at EVCA's Annual Symposium in Rome, where such issues as benchmarks, reporting, performance and investment trends were all discussed. As we reported in a recent newsletter these were themes that have particular resonance at present so we revisited some of them in this interview.

As you'll discover in the answers Carol gave to our questions, there are some fundamental factors that shape private equity investment. Some of these are well established – such as the need for a long term approach – whilst others are more recent – such as the massive upsurge in European institutional money being directed at private equity.

And what about the relative opacity of this asset class? In Carol's estimation the alleged lack of transparency is part tactical, part media hype: get to know your private equity fund managers and you'll get the answers you want but – tellingly – if you're in Europe you'll probably have done this privately in a one-to-one whilst if you're in the US you'll have expected to have found the information you want on the fund's website. There are different, culturally determined, definitions to what transparency is it seems.

Pantheon has been investing in private equity for over 18 years. As early as 1987, it created the first private equity fund of funds to be quoted on the London Stock Exchange. It now has 47 staff, offices in London, Brussels, San Francisco and Hong Kong and $5bn funds under management. Pantheon's client relationships include some of the world's leading public pensions, corporate pensions, insurance companies, endowments, foundations, high net worth individuals and family offices. It also has investment relationships with over 480 private equity partnerships in 30 countries.

At Pantheon, Carol is responsible for research into global trends, supporting asset allocation decisions and corporate strategy. Her research includes investigation into the developing private equity markets worldwide. She is a member of Pantheon’s International Investment Committee. Carol joined Pantheon in 1990 after four years with Prudential Venture Managers making European direct investments and specialising in the development of opportunities in Continental Europe. Before entering the private equity industry in 1983 she spent 11 years in manufacturing, engineering and European project management with Procter and Gamble. She has a BSc in Chemical Engineering from Birmingham University and is based in their London offices.