Co-Investments of Sovereign Wealth Funds in Private Equity

2017 ◽  
Author(s):  
Joseph A. McCahery ◽  
F. Alexander de Roode
Keyword(s):  
Institutional Investors ◽  
Private Equity ◽  
Sovereign Wealth Funds ◽  
Corporate Venturing ◽  
Developed Markets ◽  
Strong Interest ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Portfolio Investments

Direct investments are the preferred vehicle for large institutional investors to have control over their portfolio investments. This chapter studies the deal structure of direct investments by sovereign wealth funds (SWFs) in private equity transactions. Its analyses of direct investments are based on data from Global Corporate Venturing. It finds that SWFs shift from investing in private equity funds to originating and co-investing together with private equity funds in deals. The choice for co-investment affects deal size, risk-bearing, fees and returns. Overall, results of research conducted for this chapter show the strong interest of SWFs in direct investments in developed markets.

scholarly journals The Rise of Institutional Investors

2019 ◽  
Author(s):  
Jan Fichtner
Keyword(s):  
Mutual Funds ◽  
Hedge Funds ◽  
Institutional Investors ◽  
Private Equity ◽  
Short Term ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Important Position ◽  
State Street ◽  
Asset Managers

During the last decades, institutional investors gained an ever more important position as managers of assets and owners of corporations. By demanding (short-term) shareholder value, some of them have driven the financialization of corporations and of the financial sector itself. This chapter first characterizes the specific roles that private equity funds, hedge funds, and mutual funds have played in this development. It then moves on to focus on one group of institutional investors that is rapidly becoming a pivotal factor for corporate control in many countries – the “Big Three” large passive asset managers BlackRock, Vanguard and State Street.

The Private Equity Fund

2020 ◽  
pp. 40-106
Author(s):  
John Gilligan ◽  
Mike Wright
Keyword(s):  
Private Equity ◽  
Insurance Companies ◽  
Equity Fund ◽  
Investment Funds ◽  
Sovereign Wealth Funds ◽  
Private Equity Fund ◽  
Fund Managers ◽  
Limited Life ◽  
Equity Funds ◽  
Private Equity Funds

This chapter discusses private equity funds. It looks at the typical fund structures, who invests in private equity, and compares and contrasts alternative investment options. A private equity fund is a form of ‘investment club’ in which the principal investors are institutional investors, such as pension funds, investment funds, endowment funds, insurance companies, banks, sovereign wealth funds, family offices/high net worth individuals and funds of funds, as well as the private equity fund managers themselves. Private equity funds have a limited life, meaning that there is a pre-agreed date on which they will stop making new investments and subsequently be wound up. Typically, a fund invests in new projects for six years and is wound up in ten years. There is a standard extension period of two years in most fund agreements, hence they are generally known as ‘ten plus two’ limited life funds. In the past few years, some longer-term funds have started to be raised by some fund managers. These are typically targeting growth capital. The chapter then differentiates limited partners (external investors) from the general partner (the manager). It also studies the economics of private equity, examines the details of a representative Limited Partners Agreement as well as taxation, and describes the secondary fund market.

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