In this latest paper, Watson Wyatt, suggests some changes to redress the imbalance in private equity fees including changing the basis on which a manager sets its management fees; and that GPs should consider phasing in management fees over the investment period to reduce the significant fee drag from paying on commitments early in the life of a fund.
A concentrated bet on fewer, better GP relationships is paying off for one of Australia's largest superannuation funds. Built on selective manager and deal selection rather than a broad roster, the A$112 billion ($78 billion) Rest Super delivered private equity returns more than double the peer average last financial year, as the fund proactively courts top-tier PE firms instead of waiting to be approached.
Nest, the largest workplace pension in the UK, says that private credit managers who prioritise institutional clients will be more favourably viewed. The £61 billion ($82 billion) fund has awarded a £450 million ($605 million) US direct lending mandate to Crescent Capital this month, citing the manager's institutional-client-first approach as a key attraction.
Chicago Teachers is bullish on allocating to diverse managers, more than doubling its target allocation to more than half of the fund's AUM. Its CIO explains how the strategy adds value through access to differentiated strategies and competitive fee structures.
Germany’s €70 billion pension provider VBL is increasing its diversification, notably investing in overseas real estate outside Germany for the first time. It's also increasing its tilt to international equities over European stocks, enabled by an organisational and investment process overhaul.
Iceland’s LV is eyeing more emerging markets allocation and private equity co-investments after conducting an SAA review, which will be finalised in the first half of 2026. CIO Arne Vagn Olsen says the shift is designed to make the $11 billion pension fund future-ready.
Aware Super is considering a return to infrastructure funds after years of favouring direct investments. The infrastructure allocation currently stands at $15 billion and the fund sees benefits to access a “broader set of offerings” and opportunity sets via fund commitments to GPs, its head of infrastructure Mark Hector says.
The boom in private credit has been accompanied by a spike in lighter covenants, reducing protection and guardrails for lenders says Jennifer Shum, senior managing director, structured and private credit at HOOPP, and warns of mounting risks in private credit.
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