Video transcript
Jamie Wildman: We're going to talk about investing within the private equity space. There's been a tremendous amount of capital raised over the past 10 years, and the deal environment remains incredibly robust in 2021. With this great number of funds that are out there, trying to figure out where to put money is a daunting task for many. Within the private equity universe, we are generally trying to target funds that fall into one of three buckets, and ideally all three buckets. We typically focus on those funds that are a smaller fund size, so generally sub 500-million-dollar funds. We've seen a trend where the funds that have more than a billion dollars under management are typically planning higher multiples for these companies, and so there's tremendous competition within that category. So we're trying to focus more on the smaller funds where the law of numbers allows for more companies to be available, you tend to find less competition and overall valuations tend to be less robust. The second category we tend to focus on is the sector orientation. So those funds that have deep sector expertise and are really focused on one category is something we find to be incredibly attractive.
In the third bucket is funds that are on fund two, three, and four. These are funds that are emerging managers that have a track record from their fund one, but they still remain hungry to deliver outsized results.
So in summary, with private equity continuing to be raised at a record pace and the tremendous number of funds being out there that are readily available, it's often difficult to decipher between all of those strategies, but it remains critical in our opinion to focus on those components that are likely to seek true alpha.