At the 2018 Pension Bridge Annual Conference, senior investment director of Cambridge Associates’ pension practice, Alex Pekker, discusses private investment opportunities for different types of plans. Key takeaways include:
- “The most important consideration when it comes to engaging in private investments is making sure that they’re appropriate for you as a plan sponsor.”
- “Different plan sponsors have different time horizons depending on whether their plans are open or frozen, how large the plants are, and whether they plan to terminate their plans.”
- “When we invest on behalf of our clients, the first thing we do is try to understand, is this strategy appropriate? Does the plan have the appropriate time horizon? Does it have the appropriate governments to engage in private investments?”
- “It’s important to realize that private investments come in different varieties. Some of them have a shorter time horizon, meaning six to eight years, for example, private credit, which also has a cash generative property, meaning that they provide interest during that six to eight year time period. Compare it to private equity or venture capital, which have a much longer time horizon, 10 to 12 years or even longer, and don’t really provide cash flow during the investment period.”
Click here to watch the video and read the full transcript.
For an in-depth analysis on private investment opportunities and considerations for pensions, read Pekker’s article in Benefits Magazine, titled “Harvesting the Potential of Private Investments” here.