North American public pensions are becoming increasingly tapped out this year. Where is the next big source of LP capital going to come from?
I’ve spent a fair amount of my career focused on North America and the pension universe. I think it will always be a staple and a foundation, and I think [North American public pensions] will always be there. So I think it would be extreme to say that they’re going to diminish to the point that you don’t see allocation – I think the bite sizes will be smaller, but foundationally, it will exist.
You have to look geographically: Europe is somewhat in the same boat as US pension plans in terms of that retraction and what they’re dealing with. Then you go to the Asian markets, where there continues to be a very large opportunity – not just in mainland China [and] in Hong Kong, where we saw the first advent of capital into alternatives, but increasingly in Korea, Japan and wider Malaysia – [there is] real opportunity.
The other area is certainly the Middle East. I hate to use catch-alls as it relates to geographies, but the sovereign system within the various countries in the Middle East has been a stalwart in the industry… [It’s] very bespoke, and it’s really evolved over the last three to five years.
Would you say that covid has fundamentally altered the way that you do your job?
I do think it has changed the landscape, but I also think we’re back to doing business in person. And that’s a relief, right? We all went through a tremendously difficult time… That said, different markets have opened up in different time frames: the Canadians were a bit slower [and] Asia is still grappling with opening up.
Even as someone who thinks Zoom is a great thing, [when you’re] forging a relationship – whether it’s new or [whether you’re] sustaining a relationship that you’ve had for a very long time – Zoom is not a replacement… And then, frankly, if you’re going to ask for a very large sum of money, doing it in person [is] very important.
What would you say drew you to private equity in the first place?
Taking a huge step back, having been in [this industry] really since I graduated from college – I was someone who knew nothing about what they wanted to do… I was not a finance major – I was actually a history and French major. I had no applicable knowledge and frankly, [to get] into this business, I was very lucky. And I do think luck plays into it sometimes: there’s a very prescriptive way of getting into a career, and then there’s just ‘by chance’ and ‘by grit’ and you figure it out. So, I never really planned to do this.
I knew that I wasn’t going to be a principal investor. I’ve always been a people person; I’ve always been someone who likes complexity and challenge, but outward facing. I always had kind of a sales perspective. I thought about going into advertising, and that didn’t seem that compelling.
I fell into this business by working for a financial services supply incubator… I was supposed to do just broad-scale marketing, website design [and branding]. It beautifully blew up, [just like] everything did in 2001, but it was backed by two private equity firms – General Atlantic and Capital Z Partners. They were looking for someone to do investor relationship management, and Capital Z, when I lost my job at the incubator… started me there.
I got too much responsibility too soon and kind of learned on the job, and I just fell in love with it. I loved being part of the investment committees – not necessarily making the investments, but hearing how the portfolio came together, packaging that, articulating it for investors and figuring out the strategy around fundraising [from] the bottom up.
What advice would you give to someone hoping to join the private equity industry?
Having the foundational investment bank [experience], whatever you do in this industry, is a really great way to launch. Some people choose to stay in banking, whether it’s on the placement side or whether it’s in an industry group or the communications part of it, but I do think foundationally spending a couple of years at a bank, getting that training, that discipline, that basic corporate finance scaffolding, is really important.
I zigged and zagged a bit more than I would ever recommend someone doing. I think it’s important to be patient, start at the beginning, and work your way through.
We’ve talked about what aspects of the job you find enjoyable – are there any aspects that you find slightly frustrating?
I love this job because, as I said, I love to create solutions, and I’m a people person, and I love to talk to investors and hear what’s on their minds and kind of dig into… what kind of relationship we can build.
But I have to say, I’ve never been a very adventurous person, and I don’t love to travel. It might sound a little trite, and I have spent a huge portion of my career on the road, so it’s a funny thing to say out loud, but… I think there are certain people in my career that just love to be road warriors and love to be out there. I don’t hate it, but I would be lying if I said I love it. I didn’t love it before I had a family, I loved it less when I had little children, and I kind of love it even less now that I’ve gotten older and a little set in my ways.
What would you be doing if you weren’t working in private equity?
I love to garden. It’s something that I’ve always done with my mother, and then I really did it in earnest [during the pandemic]. I was very fortunate to be in upstate New York during covid, and my two daughters and I built a garden – we did farm-to-table and we only ate veggies out of our garden. The people on my team know that if I wasn’t here, I would probably have some sort of organic farm… where I was partnering with local growers and creating a sustainable ecosystem without chemicals and the like, because I really think nutrition, farming, the environment is really key.
Anyone would joke that when I come to visit with people I’m always bringing my vegetables and trying to make things. And it’s funny, because I’m a New York City girl – I grew up in New York City, but I love the kind of open space and the breath of doing something like that.
If you had the power to change one thing about the PE industry, what would it be?
I think [I would change] some of the narratives of private equity. As I mentioned, it touches many aspects of our economy and I think getting back to the basics of what private equity is – which is investing in really good businesses, backing great management teams and creating durable, long-term franchises that really contribute to the economy in different sectors in different ways.
And also, I guess ceasing to think of private equity as a catch-all. Private equity is so much more… There are so many interesting, niche sectors and strategies and approaches across the capital structure. Putting a finer point on a very, very broad term and really dissecting what that is [is important].
Heather Berger is partner and co-head of institutional client and product solutions at Apollo Global Management, where she holds responsibility for managing the firm’s traditional institutional distribution channel and products. Prior to joining Apollo in 2008, Heather worked in the private fund group at Credit Suisse Securities (USA).