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Analysis > Analysis and Strategy

Global shift to private markets and the role of fund of funds as efficient allocators in Africa

Rory Ord, Head of Unlisted Investments, 27four Investment Managers
July 25, 2019, 10:51 p.m.
432

Word count: 1215

The good news for private equity fund managers in recent years has been the marked shift in global institutional investment towards private markets investments. According to Blackrock, one of the world’s largest asset managers, the largest pension fund markets have increased their exposure to alternatives from 4% to 25% over the past 20 years. This has included private credit, infrastructure, unlisted real estate, and a host of more niche strategies, and has led to a dramatic increase in fund sizes and capital available for investment in unlisted investments globally. It has also shifted the balance of power from LPs to established GPs, who have had more than enough interest in their funds to pick and choose their LPs. In certain instances this has even led to enhanced economics for the GPs, as LPs have agreed to skewed terms just to gain access to top rated funds. In a few instances, we have heard of the emergence of 3 and 30 fees arrangements being agreed.

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