👋 Hi, I’m Michael, and it’s a pleasure to have you here. Welcome to AGM, a hub for those interested in the private markets sector. I’m thrilled to introduce you to my weekly bulletin, the AGM Alts Weekly. Each Sunday, I delve into the latest happenings, trends, and insights in the dynamic world of private markets. I compile a curated selection of news articles, share my thoughts, and provide updates on publicly traded alternative asset managers. Additionally, I highlight job opportunities within private markets firms, and recommend some intriguing podcasts and thought pieces from Alt Goes Mainstream.
I hope you’ll join us to stay informed about the ever-changing private markets landscape. We aim to keep you and your firm current with the latest trends and help you navigate this complex environment.
LemonEdge, a distinguished fund, partnership, and portfolio accounting solution, is at the forefront of private markets innovation. Backed by Blackstone Innovations Investments, among others, LemonEdge simplifies back-office operations for GPs, VCs, Family Offices, and Fund Administrators. It allows for efficient management of equity, real estate, and infrastructure investments, catering to a variety of closed-ended, open-ended, and hybrid structures. By embedding typical Excel-based calculations within its system, LemonEdge enables firms to streamline operations and deliver top-tier service to LPs and GPs.
I recently returned to London from Cannes, where I had the opportunity to moderate a panel at IPEM Wealth. The topic was “How Fund Managers Are Adapting to Seize the Wealth Opportunity,” featuring notable figures like Alisa Wood from KKR, Peter Beske Nielsen from EQT, Erwan Paugam from Ardian, and Jose Luis Gonzalez Pastor from Neuberger Berman. During our lively discussion, we explored key themes that GPs and LPs encounter as they increasingly engage with fields of wealth.
In light of last week’s newsletter, I’d like to briefly reflect on the Washington Commanders football team. Despite a tough season-ending loss, there’s much to look forward to. Commanders Owner and 26North Founder Josh Harris eloquently captured this sentiment, which he shared in a letter to the team.
During the weekend, I also attended a football match (the European kind) here in London. Joining me were Evercore’s Glenn Schorr and Blackstone’s Brian Schorr from New York, as we ventured into the energetic atmosphere of a Millwall-QPR match at South London’s The Den. While I enjoy modern stadiums, there’s nothing quite like the charm of a community-embedded venue like The Den. Millwall is particularly unique for its fierce reputation, which echoes in the fans’ famous anthem proclaiming, “no one likes us, and we don’t care.”
Conversely, the mood at IPEM Private Wealth in Cannes was quite welcoming toward private markets. It’s evident that many General Partners (GPs) are keen on the wealth channel and are prioritizing it. KKR Partner Alisa Wood warmly articulated in a Bloomberg interview that we are entering the “golden age for private markets.” With $190 trillion of wealth in individual hands, according to Alisa’s interview, the wealth channel has taken a central role in capital raising.
In Alisa’s view, the wealth channel has significant potential, especially in closing the return gap. She believes we are on the cusp of a golden age for private markets. We have certainly faced challenges in bringing private markets to the wealth channel, but thanks to product innovation, education, and tailored teams, we have made considerable progress.
This was the central theme during my conversation with Alisa, Peter, Erwan, and Jose Luis. Each emphasized the need to provide investors in wealth channels a high-quality experience. Erwan likened this experience to the airline industry, suggesting that while everyone reaches the same destination, the journey may differ. This notion highlights the varied product structures needed for different investors to align their outcomes with institutional allocators.
During our live panel survey, primarily targeted at wealth managers, private banks, and alternative asset managers, innovation and new product structures were at the forefront of the audience’s concerns. This insight surpassed the critical aspect of education. Although the survey’s sample was perhaps too limited to represent the broader industry, it still provides relevant insight. The industry has long focused on educating, but now it seems poised to take the next step — implementation.
Education plays a crucial role, yet comments from the panelists and a report from Citywire’s Selin Bucak on the significant funds raised in European evergreen (ELTIF) structures suggest that the shift toward implementation, particularly with evergreen structures, is well underway.
In terms of implementation, evergreen structures are increasingly becoming the preferred product choice for wealth channels. EQT’s Peter Nielsen noted that making it easy for the wealth channel to invest in private markets requires a relentless emphasis on delivering a top-notch investor experience.
Crafting the right investor experience is no simple task, especially with newer product formats. In an engaging conversation, I asked Alisa, who co-leads KKR’s two private equity open-ended, perpetual vehicles, about whether evergreen funds require different skillsets to manage pre- and post-investment activities. Her response was thought-provoking: managing evergreen funds shares attributes more akin to hedge funds than traditional private equity.
Effectively managing an evergreen fund and serving wealth channel investors often demands an additional attribute: scale.
Scale is pivotal — encompassing everything from capital deployment and deal acquisition to team capabilities in managing the operational demands of evergreen structures.
This discussion on scale raises another intriguing point encountered at IPEM: are the larger firms destined to dominate the wealth channel?
Undoubtedly, achieving success in the wealth channel requires scale. Brand recognition is equally important and plays a vital role in gaining traction, a benefit that extends to both large and traditional asset managers who already have a historical footprint with the wealth channel. Neuberger Berman’s Jose Luis echoed this sentiment when discussing the advantages traditional asset managers have in expanding into private markets.
While brand and scale are indeed critical, success in the wealth channel requires more than just size. Smaller firms also possess avenues to win.
Establishing a wealth business requires an entrepreneurial mindset, akin to building a startup. As Bain & Company aptly noted, this is akin to selling enterprise software. It demands harmonizing the wealth channel strategy with a firm’s ethos, culture, and competitive edge. Commitment from senior leadership, resources for growth, product innovation, and a holistic approach across departments are essential.
However, not all strategies apply universally. Alisa pointed out a crucial issue during our panel discussion and in her Bloomberg interview: the true challenge isn’t just recognizing the ‘how,’ but also identifying the ‘who’ in navigating private markets. She humorously remarked on the abundance of managers, hypothetically suggesting there are more private equity funds than McDonald’s outlets in the US.
This abundance requires alternative asset managers to differentiate themselves, particularly in the wealth channel.
Resources, including robust marketing teams generating consistent content, are essential. However, smaller firms, particularly focused specialists, still have competitive opportunities.
Various tactics exist for alternative asset managers aiming to conquer the wealth channel. If private markets manage to grow by another $15 trillion in assets under management by 2030, as Preqin forecasts, there will be both absolute and relative winners.
Here are some strategies for alternative asset managers to triumph.
Forge Direct Client Relationships
“Going direct” is increasingly vital in engaging customers authentically. Social media engagements, exemplified by Blackstone President & COO Jon Gray’s candid running videos, or podcasts have become effective tools for genuine marketing.
The advantage? Creating an authentic LinkedIn video doesn’t require a hefty marketing budget or a large team.
Content should reflect the firm and executive’s true ethos. This authenticity guides the what and how of their social media marketing efforts.
As private markets firms evolve into consumer brands, tactically linking real-world investments can enhance understanding.
In her Alt Goes Mainstream podcast, Manulife’s Anne Valentine Andrews extended this concept, emphasizing connecting real assets with real money. Visiting Manulife’s infrastructure investments with clients is one of her job’s highlights.
Such marketing tactics work especially well for investments in consumer-oriented or infrastructure sectors, providing an advantage to firms involved in areas such as infrastructure or sports. As a result, I anticipate leading alternative asset managers will explore sports-focused investment funds. Beyond their investment appeal, sports facilitate consumer connection if fans can link fund ownership to their favorite team.
Podcast episodes and social media efforts not only humanize a firm’s people but also highlight the value of its work by illustrating real-life investment examples in commerce, transportation, healthcare, or other categories.
Don’t Rely Solely on Algorithms
Social media offers a cost-effective way for firms to broadcast their brand to wealth channels. But, captives of algorithms, they have little control over audience reach.
The solution? Control your narrative with email.
Firms are increasingly connecting directly with consumers through insightful content.
Apollo’s The Daily Spark by Chief Economist Dr. Torsten Slok exemplifies this brilliance. This bite-sized, actionable content offered via email keeps Apollo at the forefront as a thought leader.
White papers have traditionally captured email addresses, but I envision firms enhancing content strategies to directly engage their preferred audiences.
Amid marketers’ concerns about inbox overload, if a firm offers valuable insights, consumers will welcome content from alternative asset managers.
Become a Content Powerhouse
Building a brand requires ownership over content creation and dissemination.
Large alternative managers often claim they’ll dominate the wealth channel with ground presence to build trust. While true, “boots on the ground” extend into digital spaces, representing a digital footprint. Firms lacking resources for comprehensive channel coverage can leverage a constant digital presence.
Firms, large or small, can transform themselves into content production engines, albeit uniquely.
iCapital exemplifies this with their in-office studio generating daily content en route to the wealth channel. By internalizing production, iCapital has flexibility and autonomy over content suited to their culture.
Blackstone’s hiring of a Senior Video Producer supports this point.
With direct engagement the new norm in media marketing, must every company now be a media entity?
Adapting to public engagement — a challenge for a historically private industry — necessitates buy-in from senior firm levels. Yet, it forms core strategy in winning wealth channels.
Where does all this leave alternative asset managers?
Conversations at IPEM prompted contemplation: can firms without GP fund stakes or public status thrive in wealth channels?
Can privately owned firms muster sufficient capital rival those with extensive marketing resources?
The chart from Blue Owl’s 2024 GP Strategic Capital Outlook underscores this notion, indicating brand importance varies among strategies.
In areas like Infrastructure and Natural Resources, the Top 10 managers dominate assets. However, focused specialists like Stonepeak and Vista in Infrastructure, and Hg Capital or Permira in software, effectively carve marketing niches, enabling wealth channel success. Notably, Stonepeak and Vista have GP stakes, while Hg and Permira do not.
These firms craft unique product formats, such as specific LP base-funded evergreen structures, to achieve capital-raising success.
Establishing strategic alliances, creating tailored portfolios for the wealth channel could be pivotal for firms, even amidst the wealth sector’s complexities.
AGM has also developed an Index tracking top publicly traded alternative asset managers.
Public trading grants insight into private market perceptions among capital-allocation investors.
Note: AUM figures are derived from fee-paying AUM where applicable.
Marketing with Social Nuance
Blackstone’s President & COO, Jon Gray, brought marketing to LinkedIn, sharing a post-game-like interview in the nerve center of their operations post-earnings call. Gray highlighted private wealth, credit, and infrastructure as growth areas.
Private Equity Returns Outshine Private Credit Amid Rebalancing
Bloomberg’s Kat Hidalgo notes recent data showing private equity returns surpassing private credit in Q3, as State Street reports. Could this shift elevate investor interest from private credit to equity, now outperforming credit?
Factors like buyout activity upticks, reduced interest rates, and narrower debt spreads drove private equity. State Street’s Nan Zhang suggests controlled inflation could sustain private equity gains.
Investors are increasingly allocating to private equity, following lagging interest in private credit. Although top private credit entities maintain fundraising, competition necessitates differentiation. At a DealCatalyst direct lending conference, Corinthia Global Management’s Mark Wilton emphasized this need. TwinFocus Capital Partners’ Paul Karger shares this outlook, avoiding what he terms “consensus trades” in private credit.
Private credit players face challenges, especially in the crowded interval fund area. Meketa Capital’s CEO Michael Bell voiced these concerns recently, signaling a need for competitive differentiation.
AGM 2/20: Private credit remains a lucrative segment within private markets, addressing financing needs amidst regulatory hurdles banks face. While attractive returns akin to private equity were achievable, declining rates have dampened some enthusiasm, making private equity allocations preferrable for some.
Private credit performed well recently. The State Street Index shows its short-term outperformance over private equity but a long-term tilt in favor of equity.
The above illustrates how manager selection is pivotal in either strategy. While private equity traditionally delivers better results, investors benefit from exposure to both strategies, diversifying risk and returns.
Investors Liquidate Record Private Equity Stakes in 2024
According to Ivan Levingston and Alexandra Heal of the Financial Times, record transactions permeated the private equity secondary market in 2024, with $162B changing hands, a 45% year-over-year uplift. Jefferies’ analysis indicates that $87B from the LP-led secondary market surpassed previous records. Discreetly narrowing discounts invite optimism for private equity managers amid heightened pricing and IPO activities.
Private credit secondaries experienced tighter NAV discounts, while real estate and venture capital pricing confronted stability. GP-led secondaries also increased markedly.
AGM 2/20: Secondaries are crucial as private market liquidity concerns resonate with LPs and GPs. Market growth in 2024 affirms the need for diversified liquidity sources and the benefits of evergreen structures, easing re-investment frictions. Portfolio management becomes critical for closed-end vehicles, emphasizing active management to ensure fruitful distributions and tackling the secondaries’ benefits. A harmonious role for both closed-end and evergreen vehicles emerges.
To advance alts into the mainstream, premium talent must enter the field. Below are openings at private markets firms eager for top performers. Let me connect you with any of these teams, if suitable. Private markets companies or funds, do reach out if you wish to highlight a role for the Alt Goes Mainstream community.
🔍 Blackstone – Senior Video Producer, SVP – Marketing. Learn more.
🔍 Apollo – Senior Public Investor Relations Professional. Learn more.
🔍 Ares – VP, Product Management & Client Services, Wealth Management Solutions, APAC. Learn more.
🔍 iCapital – Head of Business Development, Family Offices – SVP / Managing Director. Learn more.
🔍 Blue Owl – Private Wealth Strategy Senior Lead. Learn more.
🔍 Blue Owl – Private Wealth, Head of RIA Channel Marketing, Principal. Learn more.
🔍 Blue Owl – Private Wealth, Alternative Credit Product Marketing, VP. Learn more.
🔍 Brookfield – VP, Private Markets Products. Learn more.
🔍 BlackRock – Aladdin Wealth Tech – VP, Implementation Manager. Learn more.
🔍 Hamilton Lane – VP, Data Intelligence. Learn more.
🔍 Hightower – Crest Capital Advisors – Private Wealth Associate. Learn more.
🔍 Dynasty Financial Partners – Alternative Investment Specialist. Learn more.
🔍 Edward Jones – Director, Alternative Investment Strategy. Learn more.
Alt Goes Mainstream is a community of engaged private market experts and leaders. Fill out this form to explore partnership opportunities.
Recent podcast or video episodes and blog posts on Alt Goes Mainstream:
🎥 Keith Jones of Nuveen on wealth channel product structuring.
🎥 Jeff Carlin of Nuveen on prioritizing the end client.
🎥 Venkat Subramaniam of DealsPlus on single-source market truth.
🎥 Yann Magnan of 73 Strings on AI in private markets.
🎥 Lawrence Calcano of iCapital on overriding value chain efficiency.
🎥 HGGC’s Steve Young and True North Advisors’ Scott Wood discuss strategy and wealth management.
🎥 Eileen Duff of iCapital on AI’s role in private markets.
🎙 Rana Yared of Balderton on Europe’s potential for global companies.
🎙 Churchill Asset Management’s Alona Gornick on private credit evolution.
🎥 Bob Long of Stepstone on evergreen structures.
🎙 Ben Carlson of Ritholtz Wealth on asset allocation and private markets.
🎙 Sean Ward of Blue Owl GP on pioneering GP staking.
🎥 Steve Case of Revolution shares insights from his trailblazing career.
🎙 Chris Long of Palmer Square on credit investment and soccer franchise successes.
🎙 Laurence Tosi of WestCap on market-defining investments.
🎙 Chris Ailman of CalSTRS shares portfolio management insights.
🎙 Haig Ariyan of Arax Investment on wealth management growth.
🎙 John Stecher of Blackstone breaks down tech’s impact on private markets.
🎙 John Burbank and Ken Wallace share macro and VC insights.
📝 Yann Magnan and 73 Strings build next-gen monitoring for private markets.
🎙 Robert Picard of Hightower discusses alternative investments strategy.
Thank you for reading! If you liked the Alts Weekly, feel free to share it with those who might find it valuable. Subscribe to stay updated with all the latest in private markets, and follow me on LinkedIn or Twitter (@michaelsidgmore).
If you have suggestions or want me to cover a specific topic or guest, reach out! Special thanks to Michael Rutter and Nick Owens for their contributions to the newsletter.
Share this newsletter with others who might find it insightful.
