We asked some of the leading figures from the institutions represented in the Global Investor 100 five questions on today’s private equity market. In the fifth of five articles, these executives share their thoughts on selecting GPs for their private equity portfolios and advice for managers looking for a commitment. You can find the other four articles in the index box to the right of this page and on the Global Investor 100 welcome page.

In today’s environment, what are your priorities for selecting GPs to work with?

 

Sebastiaan Ranner, senior fund manager, private equity and infrastructure, MN (35)

“Experience, strong track record and clear ability to create value in today’s environment and the years ahead.”

 

Peter Teti, senior vice-president, private equity and relationship investing, and Mark Cormier, director, private funds and asset management, AIMCo (86)

“We look for consistent attractive risk-adjusted returns. Performance is our primary focus. We also look at the volatility of returns and spend a lot of time looking at the loss ratio.”

Chris Phillips, spokesman, Washington State Investment Board (9)

“Longtime relationships, shared values, high integrity and a willingness to meet the transparency requirements that come with working with a public fiduciary.”

 

Robert Coke, head of buyout and residential property, Wellcome Trust (25)

“We are looking for managers that have an edge. This is often due to sector specialisation, size, an ability to improve investee companies and access to capital markets. Our GPs also need to show an acute understanding of the current environment with its evolving social and consumer sentiments.”

 

John Bradley, senior investment officer, private equity, State Board of Administration of Florida (22)

“We look for partners whose strategy is differentiated and complementary to our existing portfolio and who have a track record of success in executing that strategy.”

 

Daniel Winther, head of private equity and infrastructure, Skandia Mutual Life Insurance Company (60)

“We always look for stability, complemented with a strong competitive advantage of some kind. Our style is not to do opportunistic investments.”

 

Vipon Ghai, global head of private equity and credit at Manulife Investment Management (26)

“Our team brings both a GP and an LP perspective to the table, which enhances our interactions and relationships with GPs. Our advice to GPs looking to manage our capital is to clearly identify specific and multiple levers they can wield to create value. We value those GPs that bring a deep operational focus to their investments; we believe it’s those managers that can thrive in a variety of environments.”

 

Greg DeNinno, managing director of private investments, Howard Hughes Medical Institute (66)

“Focused and differentiated strategy that does not stray outside of defined sectors, regions or size.”

 

David Lee, director of private equity, New Mexico State Investment Council (94)

“We look for funds with strong, consistent performance across different economic cycles and organisations that have demonstrated the ability to attract and retain excellent investment professionals. We also seek to partner with organisations that have demonstrated their commitment to outstanding performance, instead of impressive asset accumulation.”

 

What’s your one piece of advice for a GP looking to manage your capital?

Sebastiaan Ranner, senior fund manager, private equity and infrastructure, MN (35)

“Create optionality in your strategy: ie, enable debt investments in your own companies,
keep enough capital in reserve for liquidity purposes.”

 

A spokesperson for the office of the treasurer, Connecticut Retirement Plans and Trust Funds (95)

“Don’t let our first meeting take place after you’ve launched a fundraise.”

 

Chris Phillips, spokesman, Washington State Investment Board (9)

“Deeply understand our investment discipline, our mission, our people, and our culture as much as our investment needs.”

 

Daniel Winther, head of private equity and infrastructure, Skandia Mutual Life Insurance Company (60)

“Spend time with us way in advance of the next fundraise.”

 

Greg DeNinno, managing director of private investments, Howard Hughes Medical Institute (66)

“Be humble, grounded and pragmatic.”

 

John Bradley, senior investment officer, private equity, State Board of Administration of Florida (22)

“Do your homework on our current portfolio and be able to clearly explain where you fit and how you can be additive.”