Side Letter: LPs devoted to diversity; BlackRock’s insurance insights; Moonfare’s India expansion

Our colleagues at New Private Markets have produced a handy guide for emerging and diverse managers seeking LP capital. Plus: BlackRock says insurers are upping their PE allocations and Moonfare has landed in India. Here's today's brief, for our valued subscribers only.

Just happened

LPs devoted to diversity
For emerging or diverse managers, securing capital and managing expectations from institutional LPs is never an easy process. For those owned by women or minorities and locally specialised firms, there’s a growing number of investors setting aside capital for emerging manager programmes. Our colleagues at New Private Markets have compiled a handy list of some US-based institutional investors that are doing just that, including their allocation sizes, investment criteria and best point of contact.

In the list are Massachusetts Pension Reserves Investment Management BoardLos Angeles County Employees Retirement Association and a trio of pension funds from Illinois, which follow the state’s “aspirational goal” of ensuring at least 20 percent of investment advisers are minorities, women or persons with disabilities. Chicago Teachers’ Pension Fund, for example, has invested $6.2 billion (nearly half of its assets) in firms majority-owned by racial minorities, women or people with disabilities, per its 2021 diversity report. Recent commitments include $15 million to women-owned Turning Rock Partners II; $10 million to African-American-owned Red Arts Capital I; and $10 million to Asian-American-owned Long Arc Capital Fund I.

As former CTPF CIO Angela Miller-May told Private Equity International last year, diversity and inclusion is driven by its members. “They want to see their money invested by people that are reflective of them,” she said. You can find the other nine LP profiles on NPM here (registration required).

We have a favour to ask…
Once again a team from PEI Media is heading out on a (hopefully) balmy October morning for this year’s Royal Parks Half Marathon to raise money for Shelter, the UK homelessness charity. Any support will be very gratefully received; if you would like to donate, you can find our fundraising page here.

They did the math

Taking cover
Insurers are reasonably bullish on private markets despite concerns over inflation, asset pricing and liquidity. That’s according to BlackRock’s Global Insurance Report 2022, published Tuesday. Here are some key takeaways:

  • More than a third of global insurers plan to increase their PE allocations in the next 12 to 24 months, with just 8 percent planning a reduction. European insurers are by far the most bullish, with 48 percent planning an increase.
  • Nearly a third of global insurers plan to increase their alternatives allocations, while 17 percent will do the opposite. Latin American insurers are most bullish on alternatives, with 39 percent plotting an increase.
  • Insurers who answered the survey plan to increase their allocation to private markets by 3 percentage points on average over the next two years.
  • Most (86 percent) consider DE&I in some way when selecting asset managers and when selecting investments. Over 90 percent of respondents are likely to increase their allocations to impact investments.
  • Nearly two-thirds (60 percent) said inflation risk is the most significant macroeconomic concern this year, narrowly edging out asset price volatility (59 percent) and liquidity risk (58 percent). However, 67 percent expect inflation to stabilise over the next year.
  • In the face of market volatility, 79 percent of insurers are seeking to re-evaluate their strategic asset allocations sooner, rather than later. However, most are not considering changing their risk profile, with 68 percent intending to keep it the same.

Essentials

I’ll be DACH
German fund of funds Munich Private Equity Partners has appointed a former Edmund de Rothschild executive as its co-head of business development. Sebastian Schwarzenegger will acquire and service institutional clients and sales partners with a focus on the DACH region, per a statement. Schwarzenegger joins from Edmund de Rothschild where he was an executive director and was responsible for servicing German and Austrian investors such as private and commercial banks, insurance companies, pension funds, family offices and wealth managers. Munich Private Equity oversees more than €2 billion in assets under management and over 200 fund investments.

Moonfare in India
Moonfare, the Europe-headquartered fundraising platform best-known for connecting individual investors with the private markets, has continued its Asia-Pacific expansion by launching in the subcontinent, per a Tuesday statement. Indian individuals can now access Moonfare’s offerings, which include the likes of KKR and Carlyle Group, for as little as $60,000. Private Equity International explored Moonfare’s next steps and Asia-Pacific buildout back in May. Read that here.

Dig deeper

Institution: Cathay Life Insurance
Headquarters: Taipei, Taiwan
AUM: NT$7.04 trillion

Cathay Life Insurance has committed $80 million to Clayton, Dubilier & Rice Fund XII.

As shown below, the NT$7.04 trillion ($221 billion; €227 billion) Taiwanese insurer’s recent private equity commitments have focused on buyout private equity strategies, focusing on the sectors of technology, media, telecommunications, transport and business services.

For more information on Cathay Life Insurance, as well as more than 5,900 other institutions, check out the PEI database.


Today’s letter was prepared by Alex Lynn with Carmela MendozaMadeleine Farman and Tobias Waters.