SCOPE:
One of our public plan clients approached EnnisKnupp to help them start a private equity program. Out of their total program assets of $25 billion, the initial allocation to private equity was 5% with a risk tolerance of medium to high.
APPROACH:
Whenever we assist a client in starting a private equity program, we study and evaluate the current practices in four major areas:
- Policy and pacing
- Program development
- Investment management
- Reporting and monitoring
RECOMMENDATIONS:
Policy and Pacing. We assessed the client’s risk profile and developed an investment policy statement for private equity. We also outlined a specific investment process necessary to develop and implement a successful private equity program.
Program Development. We recommended pacing and sub-asset allocations, evaluated appropriate investment vehicles, conducted due diligence on investment opportunities, and presented our research to the Board for its approval.
Investment Management. We provided a detailed legal review to the client on every proposed investment.
Reporting and Monitoring. We closely monitored the performance all of the managers who oversaw our client’s investments and made regular reports.
OUTCOMES:
To date, we have deployed over $1 billion to selected private equity managers. We actively participate in the closing process to help ensure that our client’s best interests are well represented and track both cash flows and valuations on an ongoing basis.
We participate on advisory boards as needed, attend annual meetings, and provide our client with quarterly reports customized to their needs. In addition, we develop and implement educational programs for the client and provide ongoing portfolio reviews on a regular basis.