PE (Re-)Allocations


With oil prices at an all-time high, a struggling dollar, volatile equity markets, fallout from the credit crunch in fixed income values, there are some LPs that are now facing private equity allocations that are slightly out of whack, preventing them from being able to make commitments to otherwise good quality funds.

From the boom of the dot-com era to the steady flow into buyout funds, some LPs have also found themselves with hundreds of GP relationships to manage, making it unwieldly for limited staff.

Pushing the rock up a hill for the past few years, we have been working with and helping build a firm that specializes in the securitization of private equity pools, both known and blind pools.  Compared to selling to the secondary players, securitization provides as much or more cash and still allows the LP to participate in some upside going forward.  It also would provide a consolidation of the administrative burden of numerous, disparate GP relationships that the LP may not be interested in re-upping with anyway.

Essentially, this is a solution that can provide a recap to out of whack PE portfolios that still allows an upside ride, cash for reallocation, and administrative clean-up. 

If anyone wants to learn more, please feel free to email me at jnieman@collectiveiq.com and we can talk about how this might be helpful.