Merrick McKay (Abrdn): The advantages of investing in specialised Private Equity funds - Part 2

Access to the best private equity funds—which are often oversubscribed—is a major challenge for investors. These highly sought-after funds have the ability to select their investors, making it particularly difficult for new entrants to gain access. Established players, which have been in the market for decades, enjoy a key advantage: established relationships and credibility built over time, which allow them to retain their allocations.For new investors, gaining entry into these funds is complex. However, fund managers are now adopting a more strategic approach to building their investor base. They are seeking to diversify their investor profiles, particularly by gradually opening up to new segments such as wealth management or private investors.In this context, an investor’s value no longer rests solely on their size, but also on their ability to bring something distinctive to the table. For example, platforms like Altaroc offer managers structured access to a private clientele that would otherwise be difficult to reach, while simplifying the traditional constraints associated with feeder vehicles. Another key factor is the ability to commit to a long-term relationship. Managers favor investors capable of regularly reinvesting in their successive funds (re-ups), which ensures capital stability and continuity in the partnership.Ultimately, gaining access to the best funds depends on three key factors: track record and reputation, the ability to provide specific added value, and a commitment to a lasting relationship. Without these elements, it becomes very difficult to gain access to the market’s top-performing funds.