July 2017

Special Report on Private Equity: 7 Ways PE Firms are Evolving

Mergers & Acquisitions

Andrea Auerbach, global head of private investment research at Cambridge Associates, discusses the latest trends seen among private equity firms and strategies, highlighting sector-focused investments, co-investments, and operational expertise among GPs as opportunities for institutional investors. Key takeaways include:

– “Co-investment has become more commonplace. Every fund manager we meet with says they have co-investments available. It’s part of the landscape and it’s not going away anytime soon.”
– “Firms with operating partners should be demonstrating their capabilities in revenue growth, as well as margin expansion. GPs have to prove how their operating partners are improving the businesses and it’s not that easy to do, especially at the larger end of the market.”
– “We don’t expect the proliferation of sector-focused funds to change… The industry is over 30 years old now and continues to evolve towards specialization. Our data shows firms with sector specialization have a competitive advantage. ”

Read the full report here.

Read Cambridge Associates’ sector-focused private investments research paper, “Declaring a Major: Sector-Focused Private Investment Funds,” here.

Read Cambridge Associates’ co-investment research paper, “Making Waves: The Cresting Co-Investment Opportunity,” here.