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agenda >> the private equity exclusive 2013
2013 Private Equity Exclusive
The Private Equity Exclusive, Chicago
Trump International Hotel Monday July 22nd, 2013
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Registration, Meet and Greet
Mid-Year Investor Outlook – Highlights from the latest Global
- Private Equity Barometer
- LP Appetite for Private Equity
- Returns and Expectations
- Fund Terms and Conditions
- Distributions Forecast
- Private Equity Valuation Predictions
Luca Salvato, Partner, Coller Capital, Inc.
The Case for DC Plans Implementing a Private Equity Platform and its Far-Reaching Industry Effects
- Portfolio Analytics
- How to Implement such a Program Mechanically – Legal, Regulatory and Operations
- Optimal Allocation and Commitment Pacing
- Prospective Managers – will they Decrease your Portfolio’s Risk through Diversification and Add to its Returns?
- Implications for more than a Double in PE Industry Assets Under Management
- How will DB Professionals Compete with this Wall of New Money?
Kevin K. Albert, Partner, Managing Director, Pantheon Ventures
Fund of Funds
- Fundraising Statistics and Declining Fund Size
- Consolidation – Inevitable and to what Extent?
- What is the Main Investor Rationale for using Private Equity Fund of Funds?
- Why would a Large Investor use a Fund of Funds?
- Pros and Cons of Fund of Funds
- How much Value does a Fund of Funds have to Add to Cover the Added Layer of Fees?
- Performance of Fund of Funds vs. Direct – Statistical Comparisons
- Mitigating Risk – what are the key Diversification Parameters?
- Manager Selection – Due Diligence, Key Criteria
- What are the Points of Distinction between an Upper Quartile Manager and the Median?
- Explain Emerging and Future Trends such as Specialization, Niche Strategies, Separate Accounts, etc.
- The VC List has shuffled – what happened to the ‘Top 10’? Have Funds of Funds Adapted?
- Geographical Diversity in Venture – what makes Silicon Valley special and what is happening in New York?
- What are the Biggest Investment Trends among Venture Funds of Funds?
- How can we Avoid Over-Allocation to Lower Performing Vintages and Under-Allocation to Attractive Vintages?
Malcolm B. Nicholls, Partner and Co-head of the Private Investment Funds Group, Proskauer
Charles H. van Horne, Managing Director, Abbott Capital Management, LLC
Gordon S. Hargraves, Partner, Private Advisors, LLC
Tim Bliamptis, Managing Director, Weathergage Capital, LLC
- What Major Developments have we seen over the Past Year? Appetite? Fundraising?
- BRIC Counties – GDP, Growth, Debt and Reserves in comparison to Developed Markets
- Demographics Overview – Industrialization, Urbanization, Consumer and Working Class Population, Middle Class, etc.
- How have Emerging Market Returns stacked up to Developed Markets?
- What do the Exit Strategies look like in Emerging Markets?
- Choosing an Emerging Markets Fund or Manager – should you be Investing in Regional Funds, Country Specific Funds or Sector Funds?
- Which Countries offer the Best Opportunities and Returns? Overview of Asia, Latin America, India, Russia, Africa
- China Slowing Growth – is a Hard Landing possible or will China avoid it with more Rate Cuts and Monetary Stimulus? Lower Returns for China?
- How do Valuations look relative to Risk? Are Risk and Return in Balance?
- Are Investors Chasing Asia's Outsized Returns? What attractive Dislocations are there to avoid Chasing Hot Money?
- How should Inflation and Currency Risks be factored in by GPs and LPs?
- What would be the Effects on Emerging Markets if we see a Recession in Developed Markets?
- Making the case for Frontier Markets – Diversification, Low Correlation to Developed Markets
- Which Markets in Frontier Countries can you Profit from Growing Local Consumption?
- What Countries will be the "future stars" and overtake BRICs?
Kenyatta K. Matheny, Senior Investment Officer, Teachers' Retirement System of the State of Illinois
Pavan A. Gupte, Chief Strategy Officer, CVCI Private Equity
C. Wen Tan, Partner, Member of the FLAG Asia Investment Committee, FLAG Capital Management, LLC
Tom Speechley, Partner, The Abraaj Group
- Why are Plan Sponsors establishing Emerging Manager Programs?
- How are Plans defining Emerging Managers?
- What are the Benefits & Opportunities offered by Investing in Next Generation Managers?
- What are the Growth Prospects?
- Exploiting Price Inefficiencies by utilizing Emerging Managers
- What are the Risk/Return Prospects of Emerging Manager Programs vs. Programs focused on Established Managers?
- How is Establishing this type of Program different from others?
- Due Diligence and Key Points of Analysis for Selecting Emerging Managers
- New Firms/Emerging Manager Fundraising – how important is it to be spun out from Traditional or Name-Brand Firms? Key Differentiators that enable a Successful Fund Raising?
- Are there any Differences in Procedures for Monitoring Emerging Managers?
- What is happening with Funds that have Reached Critical Mass?
- Explain the Perceived Risk of Investing in Emerging Managers and why it’s Inappropriate
- Relying Less on Leverage
- How do you Measure Success?
- What is an important Lesson Learned from your Experiences?
Karen Rode, CFA, CPA, Partner, Head of Global Private Equity, Hewitt EnnisKnupp, Inc.
Paul Denning, CEO, Denning and Company, LLC
Sharmila Chatterjee Kassam, Director of Strategic Relations, Employees Retirement System of Texas
Alex Doñé, Executive Director of Private Equity/Emerging Managers, New York City Office of the Comptroller, Bureau of Asset Management
Stewart Hay, Partner, SL Capital Partners LLP
Cocktail Reception Concludes
Tuesday July 23rd, 2013 - Trump International Hotel
“PE and DB - Factors That Will Change Their Relationship in the Decade Ahead”
Keynote Speaker: Mario Giannini, CEO, Hamilton Lane
Interviewed By: David S. Blitzstein, Special Assistant for Multiemployer Funds, UFCW International Union, Board Member, Maryland State Retirement and Pension System
FEATURED PANEL: Current State of the Private Equity Market
(A) Fundraising Environment
- What Sectors and Geographies are attracting the most Interest?
- What are the Characteristics of those who are successfully able to Raise Funds?
- Key to Fundraising for Fund of Funds – Returns or Specialization?
- Trend of Committing More Capital to Fewer Managers – how extreme will the GP Shakeout be?
- Trend of Big LPs committing to Customized GP Relationships with Separate Accounts – how will it impact the Industry?
- What are the Biggest Reasons for Re-Ups? Performance? Terms & Conditions?
- New Firms/Emerging Managers – what is the Criteria seen for Good Fundraising Results?
- Do you believe there to be a Predictive Capital Call Scheduling Model via Timing, Distributions and
- Public Market Performance?
- Are LPs getting more Distributions than Capital Calls?
- With Huge Potential Sources of Capital, will Sovereign Wealth Funds be PE’s “white knight”?
- Do you believe GPs Inflate Valuations of Existing Portfolio Companies while marketing Follow-on
- Funds? Will we see Increased Regulation from the SEC on Reporting Inflated Fund Performance?
(B) LP/GP Relationship – Fees, Terms and ILPA Principles
- Are LPs willing to Pay Higher Fees for Managers with the Best/Proven Track Records?
- Will Performance or Incentive Based Fees be more likely in the Future?
- What Breaks in Management Fees have you seen for LPs to make the First Close?
- What is “European Waterfall” and do you expect it to become more common?
- Do you believe GPs will Invest more in their Own Funds to Achieve a Greater Alignment of Interests?
- As an LP, is it an Investment Deal-Breaker if a Fund did Not Conform to ILPA Principles? Does
- Adopting ILPA help with Fundraising?
- Any Advice for GPs in approaching the ILPA Guidelines?
- ILPA Standardized Reporting – does it Create Transparency? Will it become Universal?
- Do you believe that IRR Overstates True Returns? If so, why and what other Metrics can be used in Measuring Performance?
(C) Investment and Exit Environment
- State of the Economy for US, Europe and Asia – what is your Outlook and Expectations for its effects on Private Equity? What is your Biggest Worry?
- Dry Powder – do you believe GPs have been Disciplined or have they rushed to Invest this Capital? How might this Impact Investment Activity and Returns?
- Financing Buyout Transactions today – has the Market Frozen up for Large Deals? Could Mezzanine Benefit?
- Slowdown in IPOs and M&As – what Conclusion can you Draw? Expectations for Exit Market? Will Average Hold Period Increase even more?
- Growth Equity Performance and Outlook
- Wall of Debt Coming Due – have Distressed Opportunities been pushed out? How is the Opportunity Set now?
- Do you like Distressed Debt Opportunities in Europe? Is it still too early?
- Co-Investment Expectations – do you see Higher Return Potential?
- Thoughts on Venture given the Lack of Performance over the past decade
- What will be the Impact of the Volcker Rule? Will it create a Boost to Secondary Market Activity?
- Niche Strategies – which ones are most Appealing?
- Which Strategies offer Shorter Time Horizons, Cash Yields and Greater Liquidity?
- Will ESG Considerations play an Increasing Role in the Fund Selection Process in the next few years? Does ESG help Create Value?
- In-State PE Investing – besides Collateral Benefits, are the Returns Sacrificed or Achieved?
- Where do you expect that we’ll see the Best Returns over the next Five Years? Favorite Sector?
Scott Jacobsen, CFA, Senior Portfolio Manager, Private Equity, CalPERS
Chris Anderson, Senior Manager, Private Equity, Alcatel-Lucent Investment Management Corporation
Stephen P. Murray, President and Chief Executive Officer, CCMP Capital Advisors, LLC
Susan J. Carter, President and Chief Executive Officer, Commonfund Capital, Inc.
Michael J. Moy, Managing Director, Pension Consulting Alliance Inc., (PCA)
David Fann, President and Chief Executive Officer, TorreyCove Capital Partners
- What are your Expectations for Deal Flow Volume?
- How will the Investment Pace be Impacted by the PE Overhang?
- What are your Expectations for Capital Calls?
- What Types of Deals will be most Prevalent? Public-to-Private, Secondary Buyouts, Corporate Spin-Offs, Large vs. Small?
- What will be the most Appealing Sectors and Geographies going forward?
- Do you see Opportunities in Europe?
- What Trends do you see taking place in Financing Deals for now and the future?
- Is Credit Cheap or Expensive relative to the Risks in today’s Market?
- Do you see the possibility of Credit Risk being Re-Priced and potential for Credit Tightening for an Extended Period?
- Are Large Deals Difficult to Finance? Has this led to more Smaller Deals?
- What are the Drivers Creating Value?
- In a Macro-Driven Environment, is Market Timing the Biggest Factor in Returns and Risk? What should LPs do to prepare for the Current Macro-Environment?
- Are GP Operational Teams Growing and becoming an LP Demand for Improving Current Portfolios? Are GPs focused on cost reduction of companies in their portfolio?
- Are the Impacts of Public Market Performance and a Stable Economy the most important Factors/Challenges for Future Valuations?
- Mounting Pressure from Pension Plans – do you believe that Dividend Payouts represent a Financial Burden and create Future Risk?
- What are your Expectations for Exits and Distributions?
- What have you Identified and Learned from recent Successful Exits?
- Longer Holding Period for Companies? Will it remain long and what are the Implications?
- Secondary Buyouts – will the Increase in Sales Activity among PE Firms continue?
- Upcoming Shakeout – how will the increase in “Zombie” Funds impact the Industry?
- How are LPs dealing with the wave of Extensions?
- Risk Profiling of Small, Middle and Large Buyouts – any Conclusions?
- What are the Problems you see in the GP Space that you would correct? What would you encourage LPs to look for?
Thomas K. Lynch, CFA, Senior Managing Director, Cliffwater LLC
Douglas F. Londal, President, Chief Operating Officer and Managing Director, New Mountain Capital LLC
John A. Drake, CFA, CPA, Senior Investment Officer - Private Equity, State of Wisconsin Investment Board
John W. Jordan II ("Jay"), Co-CEO and Managing Partner, The Jordan Company
Jonathan M. Rather, General Partner, Chief Financial Officer, Welsh, Carson, Anderson & Stowe, (WCAS)
- Who are the Biggest Sellers?
- What are the Reasons for Seller Motivation by Public Pension Plans? Reasons for Banks to Sell?
- What are the Reasons behind the Secondary Buyout Volume Surge?
- Secondary Deal Volume hits a record 3 years in a row, (2010, 2011, 2012). Where will it go from here?
- What Forces are behind the Bid-Ask Spread?
- What sort of Discounts are we seeing on the Secondary Market and do you expect Valuations to Flatten or Decline?
- Supply/Demand – why aren’t there more Sellers and why are they waiting?
- Fundraising – what should LPs look for to Identify Differentiation?
- Specialization – what will it look like? What are the Strategies that will Benefit?
- Volcker Rule and its impact on the Secondary Market
- What is a Synthetic Secondary? What is the Origin of the Investment Team?
- What are the Benefits of Synthetic Secondaries?
- What should LPs consider when Liquidating portions of their Private Equity Portfolio?
- What is the Role of the GP in the Secondary Market and how has that changed over time?
- What are the Risk/Return Characteristics of Secondaries vs. Private Equity in general?
Mark T. Maruszewski, CFA, Partner, StepStone Group
Joseph Marks, CFA, Managing Director, Capital Dynamics
Ian Charles, CFA, Partner, Landmark Partners
Greg Walters, Principal, Pomona Capital
- Reasons why Co-Investments are Attractive to LPs
- What are the GP Reasons for Co-Investing? Are they an Incentive for LPs to participate in their next Fundraising?
- Are most LPs likely to only Co-Invest with Firms with an Existing Relationship?
- Approach and Criteria for Co-Investments
- Where do Co-Investments make the most sense?
- Understanding the Trends and Performance of Co-Investments in Small, Medium and Large Buyouts
- Have Co-Investments Outperformed Net Fund Returns? Do Co-Investment Funds have a Lower Risk and Higher Upside Potential?
- What are the Success Factors for LPs?
- Co-Investment Funds vs. doing it yourself
- Staffing and Man-Power Concerns
- What are some Do’s and Don’ts? Lessons Learned?
- What can you do to Protect against Unintended Results within the Co-Investment Partnership Arrangement?
- Legal and Operational Risks
Matthew O’Reilly, CFA, Chief Investment Officer, San Antonio Fire and Police Pension Fund
Brett Fisher, Co-Founder and Managing Director, Fisher Lynch Capital
Robert Wadsworth, Managing Director, HarbourVest Partners, LLC
Charles Huebner, CFA, Managing Principal, RCP Advisors, LLC
Gregory J. Turk, CFA, Director of Investments, Teachers’ Retirement System of the State of Illinois
Mezzanine Debt Investing
- Debt Maturity Wall – where does it sit today? CLO Loan Maturities?
- How much Buyout Dry Powder is out there and will it Benefit Mezzanine? What are your Views for this Cycle?
- Tightening of Credit from Banks – will Mezz continue to become more prominent?
- The Need for Mezz Capital – is there a Shortfall creating Favorable Conditions?
- Mezz Stability – Peak to Trough Drawdown during the Financial Crisis compared to PE Sub-Sectors and other Asset Classes
- Important Non-Correlation Factor
- Do you consider Mezz to have an Attractive Risk/Return Profile and why?
- How are Deals being Structured and Priced?
- What are Current Deal Terms? Cash Coupon, PIK, Warrants, Equity Co-Investments?
- Unitranche Deals on the Rise – is this a good thing? Pension Plans’ thoughts?
- What does the Cash Flow Model and Return Structure look like? J-Curve Minimization?
- Issues, Competition, Liquidity, Pricing and Returns Expectations
- Risk/Reward of Micro, Middle, and Large Market
- Is the Lack of Institutional Data and Coverage of the Mezzanine Asset Class an Obstacle?
- Will BDCs continue to become more Common? What are the Benefits for Managers? Any Downside for LPs?
Nat Kellogg, CFA, Associate Director of Research-Alternatives, Marquette Associates, Inc.
David Petrucco, Managing Partner, Kayne Anderson Capital Advisors, L.P.
Scott Essex, Managing Director, Partners Group
Distressed Debt Investing
- Where are we in the Distressed Cycle? How much of the Opportunity remains?
- How have Financing Markets Activity affected the Opportunity Set and what is the Outlook? Maturity Wall?
- Where are the most Attractive Strategies/Opportunities? Sectors? Geographically?
- Scope of the Distressed Market and Segments – Corporate Credit, Structured Credit, Commercial Real Estate, Hard Assets, Liquidations, Segmentation by Deal Size, etc.
- Eurozone Opportunities – what Investments are sensible and when will they arrive in scale? Still too early? Which Countries, Sectors, Types of Deals should be looked at?
- What are the Challenges in Sourcing and Executing Investments in Europe?
- U.S. Distressed Opportunity vs. the European Opportunity – what do we need to know before making Allocation decisions?
- Effects of Basel III, Dodd-Frank and Volker Rule on the Opportunity Set?
- Pitfalls of the Economy and Risks for Investing now?
Control vs. Non-Control – when is one Approach better than the other?
- Are Buyout Firms still moving into Distressed Deals? Competitive Landscape?
- What Characteristics/Skill Set should Investors look for in a Distressed Manager?
Michelle Davidson, Managing Director, TorreyCove Capital Partners
Jonathan Mandle, CFA, Partner and Head of Absolute Return and Credit Strategies, Corrum Capital
Nathaniel M. Zilkha, Global Co-Head of Special Situations, Kohlberg Kravis Roberts & Co, (KKR)
Jean-Louis Lelogeais, Co-Founder, Senior Managing Director, SVP Global
- What is the Current State of the Credit Market and how will this Cycle play out?
- Refinancing Challenge Status – how should Investors be positioned?
- LBO Volume and Expectations
- What is the Current State of the Securitization Market? Does it remain Dislocated and what are the Opportunities?
- RMBS/CMBS Market Overview
- CLO Reinvestment Challenge
- Are you Cautious on High Yield?
- Default Rate Expectations
- Eurozone Debt Crisis – what is the Impact on European Credit Markets and how is the Opportunity Set?
- Where is the Best Value in European Credit?
- How do you Manage a Credit Program in a Volatile Market?
- What Lessons Learned should be taken away from 2007-2008?
- How has the Competition (Fixed Income, Hedge Funds, etc.), altered the Market?
- How should Pension Plans go about Analyzing, Selecting and Implementing the various Credit Funds?
- Considerations for Selecting a Credit Manager
- What Sub-sectors of Credit are the most Attractive Opportunities? What are your Best Ideas for finding Value?
Keith Berlin, Senior Vice President, Director of Global Fixed Income and Credit, Fund Evaluation Group, (FEG)
Richard Byrne, President, Benefit Street Partners
Oliver Wriedt, Head of Capital Markets & Distribution, CIFC Asset Management
Pete Keliuotis, CFA, Chief Executive Officer and Managing Director, Strategic Investment Solutions, Inc, (SIS)
Attractive Strategies for Diversification and Non-Correlation
(A) Life Settlements
- What are Life Settlements?
- Reasons for Investing in Life Settlements – Non-Correlation to Capital Markets, Volatility
- Protection, Diversification, Amortization, etc.
- How is it Structured?
- What sort of Returns can be expected?
- Who should Pension Plans seek out for Consulting on this Investment?
- Ratings Agencies – are they a hurdle to Life Settlement Securitization?
Philip Siller, Co-CEO, BroadRiver Asset Management, LP
(B) Structured Investments in Healthcare Companies and Products
- Examining Trends in the Healthcare/Pharma Industry and the Role of Royalty Contracts
- How Large is the Opportunity? Why the Increased Popularity?
- Investment Characteristics – Liquidity/Cash Flow Strategy, Non-Correlation and Diversification from Private Equity Portfolio
- Cash Flows from Investments in Royalty Contracts
- Royalty Investing Structures – Passive/Traditional Royalties, Royalty Bonds, Synthetic Royalties,
- Structured Debt Collateralized by Royalties or Drug Revenues
Clarke B. Futch, Founding Managing Director, HealthCare Royalty Partners
- State of the Venture Industry and Fundraising Environment
- Will we see Smaller Sized Allocations into Venture?
- Status of the Exit Market and IPO Pipeline
- Exit Market Shift to M&A?
- What is the Average Investment to Exit Timeframe?
- Do you Prefer Late-Stage or Early-Stage and why?
- Outperformance of Smaller Funds – a continuing Trend?
- Why Invest in Micro-VC?
- Overseas VC Outlook. IPO Growth in China?
- Venture Capital Winners – Concentrated within the Top Few Firms?
- Social Media – Sustainable Investment Theme? Which Sector stands out?
- Thoughts on Hyperweb being the Next Big Winner and Innovation for Venture?
- Cleantech Opportunity Set – which Sectors are Attractive?
- M&A Exits for Cleantech
- Are Funding Models changing to get Cash Flowing again?
- What will VCs do differently given the Lack of Performance in the past Decade? LP Skepticism?
- Understanding Venture Return Trends – Underperformance when Investing at Market Peaks vs. Outperformance when Investing at Market Troughs
Dr. William Charlton, CFA, Partner & Head of US Investments, Altius Associates Limited
Ken Wallace, Managing Director, Industry Ventures, LLC
Cheryl L. Maliwanag, Director, Pathway Capital Management, LLC
Garth Timoll, Principal, Top Tier Capital Partners, LLC
Private Equity Energy and Natural Resources
- Why Invest in Energy?
- Market Underserved by Private Equity Capital?
- Projections of Global Energy Supply/Demand and Consumption
- China’s Consumption Projections
- Inflation Hedge, Diversification and Low Correlation Characteristics
- Are Investments likely to produce Returns Independent of Oil or Natural Gas Prices?
- Recent and Long-Term Performance
- Upstream – Value Creation
- Investing in Oil and Gas Production/Service Companies – Evaluating Opportunities and Value
(B) Natural Resources
- Current Market Environment – Demand and Pricing for Natural Resources
- China as an Emerging Consumer – Middle Class, Urbanization, Supply/Demand, etc
- Inflation Protection, Diversification and Lower Correlation to other Private Equity Investments during periods of Market Stress or Downturns
- Thoughts on Farmland and Timber? What have been the Long-Term Returns?
- Making the case for Private Investment in Natural Resources vs. Public
- Generating attractive Returns regardless of Pricing Environment – Managing Volatility
- What are the Key Criteria that would lead to Manager Outperformance?
John W. Maurer, Board of Trustees, Ohio Public Employees Retirement System, (OPERS)
Ted Patton, Managing Director, Hastings Equity Partners, LLC
Alan Kosan, Senior Vice President, Head of Manager Research, Segal Rogerscasey
- Infrastructure Demand and Size of the Market – what are the Projections for the Future?
- Infrastructure Spending/Funding Gap – Explanation of the Shortfall and if this Translates into Increased Opportunities for Pension Plans
- Public-Private Partnerships – Inevitable due to Gov’t Lack of Funding and Debt?
- Infrastructure as an Inflation Hedge and Portfolio Diversification
- Deal Flow and Fundraising
- Outlook and Challenges for Global Infrastructure Investing
- Mature vs. Emerging Markets
- Which Sectors will investors find the best Opportunities and Returns? Any Emerging Trends/Themes?
- Energy Infrastructure – Big Opportunity Set or Too Much Capital rushing into the Sector?
- Risk/Return Profiling – which Infrastructure Assets are classified as High Risk and Low Risk?
- What are some potential Unanticipated Risks? Understanding Debt Risks
- Performance – is Infrastructure delivering on its advertised attributes? What are the Return Expectations from Plan Sponsors?
- Implementation Considerations – Primary Partnerships, Direct, Co-Investment, Fund of Funds or Publicly Listed, Separate Accounts
- What should you look for in an Infrastructure Manager?
David Rogers, CA, CBV, Partner, Caledon Capital Management Inc.
Ross Posner, Group Head - Global Infrastructure & Real Assets, Allstate Investments, LLC
Glen T. Matsumoto, Partner, EQT Partners, Inc.
Dan Kim, Associate Partner, Hewitt EnnisKnupp, Inc.
Floyd Gent, Head of Infrastructure, Americas, UBS Global Asset Management (Americas) Inc.
Bus Leaves Trump Hotel for Networking Event
Lake Michigan Cruise Networking Event
Network with our group while cruising Lake Michigan. Enjoy Chicago's world famous spectacular skyline views from behind the Sears Tower, the John Hancock, the Shedd Aquarium, Aon Center and more. Other landmark highlights include Soldier Field, Buckingham Fountain and Grant Park. Join us for a cocktail reception, dinner, a few decks of luxury and an excellent atmosphere to connect with your industry peers.
Disclaimer: Pension Bridge Conferences are produced
for qualified institutional investors only