The Growing Popularity of Continuation Funds

Historically, the private equity secondary market has been used by limited partners (“LPs”) to sell exposures at the end of their lives and as such contained only tail-end exposures. Selling these lingering exposures to private equity funds allowed LPs to clean up their balance sheets and fueled the growth of secondary private equity funds within the broader private equity space. As the market evolved, however, higher-quality assets began transacting as investors started to use secondary markets as a useful portfolio management tool. More recently, general partners (“GPs”) have come to occupy an increasing percentage of the overall market. In 2023, about $110 billion in volume traded in private equity secondaries, with about 50% of the total transaction activity represented by GP-led transactions.

In this newsletter, we provide an overview of continuation funds, including their growth, structure, transaction requirements, and considerations for investors.

Marquette Views on 2024 U.S. Equities Outlook Featured on FIN News

Published May 14, Catherine Hillier, Research Analyst, was interviewed for “Q1 2024: Small-Cap Equity Hiring Sees Uptick,” by FIN News (subscription required).

Catherine discussed the outlook for U.S. equity performance, particularly in the small-cap space in the article, which posits, “Publicly-traded large-cap companies continue to garner the attention of media and investors, but allocator interest is beginning to look down market to the small-cap sector.”

The article also referenced Catherine’s November 2023 newsletter, U.S. Equities: Surprising Strength Gives Way to Macro Risks, and commentary in Marquette’s 1Q 2024 Market Insights webinar, available to watch as a recording here.

Marquette Approach to Manager ESG Due Diligence Featured on FundFire

Published March 11, Linsey Schoemehl Payne, Chief Compliance Officer and Managing Partner, was interviewed for “Consultants Evolve Approach to Assessing Managers on ESG,” by FundFire (subscription required).

Linsey discussed Marquette’s approach to manager due diligence regarding ESG integration in the investment process, explaining the “second tier” of information Marquette’s questionnaire seeks out covering the team overseeing individual strategies and the firm’s record of engagement through proxy voting and shareholder resolution.

This article follows a feature published by Nonprofit News last quarter and reflects Marquette’s 25-plus-year commitment to providing clients with clear and thorough information when considering sustainable investment options.

Marquette Speaking at Nuveen Alternatives Summit 2024 6/13

On Thursday, June 13, Nat Kellogg, CFA and James Torgerson will be speaking at the Nuveen Alternatives Summit 2024 in Chicago.

Nat will be joining a panel entitled, “Private capital: Navigating the new competitive landscape and today’s headwinds” and James will be joining a panel entitled, “Compelling income opportunities: leveraged finance” at the event. The Alternatives Summit will bring together plan sponsors and consultants to discuss the current alternatives landscape.

Frank Valle Speaking at AIMSE 2024 Annual Conference 6/12–13

Frank Valle, CFA, CAIA will be speaking at the 47th Annual Association of Investment Management and Sales Executives (AIMSE) Sales & Marketing Conference, being held June 12–14 in Boca Raton, Florida.

As a consultant roundtable speaker, Frank will engage in lively discussions with participants on June 12th  by sharing investment manager search activities, organizational updates, and methods for effectively communicating with research and field consultants. A hallmark of AIMSE conferences, the consultant roundtables feature both traditional and alternative professionals. Frank will also be joining a panel entitled, “Buying the Bull? Best Fixed Income Ideas in an Uncertain Market” on the 13th.

AIMSE’s mission is to provide a worldwide forum for sales and marketing professionals in the investment management industry. For more information, please visit the AIMSE website.

Jessica Noviskis Speaking at With Intelligence 2024 Women’s Private Credit Summit 6/12

On Wednesday, June 12, Jessica Noviskis, CFA will be speaking at the inaugural 2024 Women’s Private Credit Summit hosted by With Intelligence in Chicago.

Jessica will be moderating a panel entitled, “View From the Field: Where Does Private Credit Go from Here?” described as follows: Private credit has captured the imagination (and the wallets) of institutional investors. Firms have shown there is a true need for their services and generated necessary returns – even as interest rates have climbed. But where is private credit headed? Where are the next great opportunities – and of course – challenges as well? Our panel of leading private credit professionals discuss where they and their firms have been concentrating, the issues that have arisen, and how they are thinking of deploying capital.

The Women’s Private Credit Summit will bring together over 200 senior women – institutional investors, general partners, and relevant industry advisors spanning private equity, real estate, tech, and distress – for a day and a half of stimulating discussion, facilitated learning, and in-depth networking and collaboration. For more information, please visit the event webpage.

Griffin Gildea Speaking at 2024 Real Estate Midwest Forum 4/17

On Wednesday, April 17, Griffin Gildea will be speaking at the 8th Annual Real Estate Midwest Forum hosted by Markets Group in Chicago.

Griffin will be joining a panel entitled, “Investing in Alternatives,” described as follows: Why are investors allocating to niche asset classes in 2024? Where are they finding the greatest returns? Niche asset classes such as life sciences, shopping centers, student housing, self-storage facilities, data centers, film & television production studios, senior housing, manufactured housing, and medical office buildings are growing increasingly popular. Where should newcomers focus their attention? How are these markets changing given the current economy?

The Real Estate Midwest Forum will bring together over 200 investment executives and provides a platform for peer-to-peer knowledge exchange with content that reflects the latest in core, value add, real estate debt, industrial and hospitality investments spanning building initial allocations to managing multi-billion dollar portfolios. For more information, please visit the event webpage.

Amy Miller Speaking at CFA Society Columbus Event 2/20

On Tuesday, February 20, Amy Miller will be speaking at a dinner event hosted by CFA Society Columbus: Carrying Your Interest: The State of Private Capital.

Amy will be joining fellow panelists to discuss private assets, including the private debt, private equity, and venture capital asset classes. As we enter the 2024-2025 vintage years, the market backdrop has changed…or has it gone back to normal? Interest rates are higher, exits are lower, and the assets continue to fly into private capital. Join this panel of LPs and GPs as they discuss the state of private equity, credit, and real assets.

The CFA Society Columbus chapter was founded in 1962 and has more than 400 members representing all major institutional investment firms in central Ohio. For more information, please visit the chapter webpage.

Marquette Manager Due Diligence Featured on Nonprofit News

Published November 8, Linsey Schoemehl Payne, Chief Compliance Officer and Managing Partner, was interviewed for “Marquette Expands Due Diligence Questions On Sustainability, DEI,” by Nonprofit News, a part of FIN News.

Linsey serves as a co-lead of Marquette’s sustainable investing group and discussed recent changes to Marquette’s manager due diligence questionnaire seeking to establish a more thorough picture of sustainability attributes within the firm’s proprietary manager database, particularly regarding sustainable investment-focused teams, processes, and strategies. Additionally, the due diligence questionnaire now requests more in-depth diversity information beyond ownership attributes. As the sustainable investing space continues to evolve, Marquette is committed to creating more consistent and accessible data across the industry.

Greg Leonberger Featured on Dakota Live! Podcast

Recorded earlier this year, Director of Research and Managing Partner Greg Leonberger, FSA, EA, MAAA, FCA‘s Dakota Live! Allocator Interview is now available for viewing.

Greg spoke with Chris O’Grady, CIO and Partner at dakota, and Tim Dolan, Vice President, Institutional Sales, in the interview, titled “Building Client Trust.” Dakota Live! general calls allow listeners to access in-depth information about investment allocators through a live interview reviewing each allocator’s current needs, the details of their platform, key analysts, and their outlook on the industry.

Greg Leonberger is the Director of Research for Marquette Associates. Greg is responsible for creating the firm’s capital markets research and directing investment strategy and policies. He also serves as the chair of the investment committee. A partner of the employee-owned firm, Greg has been with the company since 2008. Greg joins us at Dakota Live! to take us through Marquette Associates’ manager research process and what they look for in asset management partners. Join us to learn how the firm’s approach to client service has made Marquette Associates so successful over the years.

For more information, please visit the Dakota Live! website.