Private Capital Managers

Private capital managers should carefully assess tradeoffs between growth via scope and growth via scale, focusing in particular on areas of current expertise and natural adjacencies. Growth initiatives must be approached thoughtfully, balancing obligations to existing investors with future plans.

Managers should align strategy and mandates through clear upfront communication, regular reporting, and periodic policy reviews. Using governance frameworks ensures investments meet both fiduciary responsibilities and specific investor requirements.

Investment performance must be measured and reported carefully to meet investor demands and regulatory requirements. Best practices include the use of a variety of metrics (IRR, TVPI, PME), the careful selection of private and public market benchmarks from various providers, and the incorporation of information like funds’ vintage years, strategies, and so forth. These elements must be brought together in a transparent and rigorous way to provide a complete picture of performance.

Managers should first identify the key drivers of their value proposition, including what contributed to their historical success, as well as the firm’s unique advantages. These drivers should be substantiated with thoughtful analytics and articulated clearly through a variety of mediums, including whitepapers, webinar presentations, and the like.

Strong oversight ensures managers follow their stated strategy, manage risk effectively, and adapt to changing markets. This includes regular portfolio reviews, due diligence, and performance monitoring against benchmarks.