PEI Quotes Amanda Butler-Jones on Secondaries Strategies

For its article “Fine-tuning secondaries strategies,” Private Equity International quoted Akin investment management partner Amanda Butler-Jones. The article looks at the increase in secondaries firms separating their investment strategies into dedicated specialist funds.

Said Amanda, “Like many other markets where there’s increased competition, specialization is a way to diversify and distinguish yourself and increase market share.”

She added that underwriting LP portfolios and GP-led processes requires different skill sets, noting, “On the LP side it’s about diversification, which is very different from the GP-led model in terms of being focused on one or more assets.” She said that separating LP and GP-led strategies may be a way to distinguish and market themselves, which is important in a buyer’s market.

Amanda also noted that concentration limits do not drive fund segregation in all cases, as fund managers can negotiate single-asset limits in the LP agreements (LPA) of their funds as they outline their strategy to potential investors: “Concentration limits are negotiable like any other term in the LPA. [Limits on exposure to single companies] would be a consideration in how to build those around in a way that works for single-asset deals—capping them or otherwise—or bucketing them from other types of deals.”