Side Letter: Volvo taps AP6 director, Neuberger’s retail launch, secondaries myth-busting

An AP6 investment director jumps ship to Volvo's corporate VC investment unit (for life, we suspect). Plus: Neuberger Berman's latest retail offering, and why secondaries may not be a J-curve mitigator. Here's today's brief, for our valued subscribers only.

They said it

“There are some of them that are pretty good, but at the bottom there is a lot of junk.”

Silicon Valley veteran Sandy Robertson tells the FT that there are simply too many buyers circling a limited number of appropriate acquisition targets in the SPAC world (subscription required).

Just happened

European LP move
Christina Brinck, a former investment director for fund investments at Swedish pension AP6, has joined Volvo Group Venture Capital, according to her LinkedIn. Brinck spent more than two decades at AP6 and for the past five years built up the pension’s venture and growth portfolio in the US. She joins an investment team of six at Volvo Group’s $35 billion corporate investment company. As investment director, her main responsibility is to make “post seed-stage investments in innovative companies with potential to transform transportation and boost Volvo Group’s growth”, she tells Side Letter. Brinck’s departure follows that of Ellinor Schrewelius, a former investment director at AP6, who joined Northern European tech specialist Verdane in March, as a director of investor relations and business development. AP6 is recruiting a replacement for Brinck, Side Letter understands.

PE democracy now
Neuberger Berman has launched a private equity product for retail and non-professional investors in what is the latest in a string of managers attempting to capture capital from individual investors. Anyone with €50,000 to spare can invest in the Neuberger Berman Direct Private Equity ELTIF, according to a statement today. The fund has a shortened eight-year life, lower fees and greater diversification than most PE offerings. Read our stories on how private equity is coming down-market here.

ESG focus in exits
Nearly three-quarters of respondents in EY’s latest Global Private Equity Divestment Study are factoring ESG into exits, with social impact including diversity and equality as the area of greatest focus. The value attributed to ESG qualities is evolving, Pete Witte, global private equity lead analyst at EY tells Side Letter. “GPs are creating value in their companies via ESG initiatives and expect to capture some of that premium on the sale.”

Essentials

Too much money, nowhere to put it
Always thought investing in secondaries flattened the J-curve at the start of a portfolio’s life? Think again. Researchers who modelled the return profile of a private equity portfolio in several scenarios concluded that investing in secondaries funds actually reduces the amount of capital at work because they distribute cash too quickly.

“The opportunity cost you save at the very beginning because you accelerated deployment can actually be more than negatively compensated by early distributions that you are not able to recommit quickly,” Cyril Demaria, co-author of Asset Allocation and Private Markets: A Guide to Investing with Private Equity, Private Debt and Private Real Assets, tells Side Letter. The findings are at odds with common conceptions about a strategy that’s touted, among other things, as being a quick way for institutional investors with fledgling PE programmes to get money in the ground.


Today’s letter was prepared by Alex Lynn with Adam LeRod JamesCarmela Mendoza and Michael Baruch.