Adverse Selection in Private-Equity Co-Investments: Insights from Calpers
Tuesday, 17 September 2024, 12:55
Exploring Adverse Selection in Private-Equity Co-Investments
In a recent statement, Stephen Gilmore, Calpers' investment chief, raised concerns about the issue of adverse selection in private-equity co-investments. He pointed out that the $503 billion pension fund must position itself as a key client for its private-equity managers to gain access to the best direct deals.
The Importance of Key Client Relationships
- Strategic Partnerships: Collaborating closely with private-equity managers ensures that Calpers can secure top-tier investment opportunities.
- Market Dynamics: Understanding the shifting landscape of private-equity investments is essential for effective allocation of funds.
Mitigating Risks
- Engaging with Top Managers: By working with leading firms, Calpers seeks to minimize the risks associated with adverse selection.
- Proactive Strategies: Continuous evaluation of investment managers helps the fund avoid potential pitfalls.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.