Private equity investing provides investors an opportunity to increase returns and lower risks. Based on historical market assumptions, private equity has the potential to achieve higher returns than could be achieved investing in other asset classes. Private equity investing also provides access to a new universe of companies not available through the public markets. In addition, adding private equity to a portfolio adds a layer of diversification that may reduce overall risk.
Private equity funds of funds pool the assets of multiple participants and invest in diversified portfolios of private equity funds. These funds of funds usually aim to commit to top tier and boutique private equity funds, including both buyout and venture capital funds. Each private equity fund, in turn, invests in privately held companies typically dispersed by geography, industry, and stage of development.
Investors in funds of funds enjoy broader diversification than could be attained through a single manager or fund. Funds of funds also offer reduced administrative burdens for investors by providing consolidated reporting and capital calls.
Northern Trust's private equity funds of funds historically have been available to both taxable and tax-exempt investors that are accredited or qualified. Investments in private equity funds are subject to private placement fund rules. Individuals must have a net worth greater than $1.5 million and entities must have investments greater than $5.0 million.
David Lester is a Vice President at Northern Trust Global Advisors. Based in the Toronto office, David leads the asset management sales effort at Northern Trust in Canada. With a focus on providing innovative investment and outsourcing solutions to the marketplace, David will be working closely with pension plan sponsors, charitable organizations, and other institutional investors. David started his investment career in 1996 with a retail mutual fund company. Prior to joining Northern Trust, David spent 12 years at SEI, most recently as the Director of National Accounts where he lead the firm’s institutional sales and marketing efforts.
David has authored a range of articles on pension-related topics in addition to speaking at industry conferences. He is a past chair of the Ontario Regional Council of the Canadian Pension & Benefits Institute and is a member of the Toronto CFA Society.
David holds a Bachelors Degree in Mechanical Engineering from McGill University where he was awarded the British Association Medal for Great Distinction. David graduated from INSEAD in Fontainebleau France with distinction, where he received a Masters Degree in Business Administration.
This material is directed to eligible counterparties and professional clients only and should not be relied upon by retail investors. It is issued by Northern Trust Global Investments Limited, authorised and regulated by the Financial Services Authority in the United Kingdom. Registered office: 50 Bank Street, Canary Wharf, London E14 5NT, registered in England 03929218.
Read the UK Stewardship and Proxy Voting guidelines by Northern Trust Corporation affiliates.