Invest Europe has launched a new guide for pension funds on private equity and venture capital investment.
The Guide to Private Equity and Venture Capital for Pension Funds contains practical information on why to invest and how to do so, plus an overview of the benefits and risks of gaining an exposure to private equity and venture capital.
Aimed at helping pension funds with limited experience of the asset class achieve an understanding of its features, the document draws on the experience of long-standing investors such as Ilmarinen Mutual Pension Insurance Company, APG Asset Management, SPF Beheer and Stichting Pensioenfonds TNO to show, via case studies, how pension funds can manage their portfolios and exposure to private equity and venture capital. It also sets out the different points of access available to investors and outlines the areas pension funds need to consider, such as how to select managers and gain adequate portfolio diversification.
Pension funds are an important source of capital for Europe’s private equity and venture capital funds, accounting for almost a third of funds raised over the last three years, according to Invest Europe data. The most commonly-cited reason for pension funds to invest in the asset class was returns, according to Greenwich Associates research, with the largest proportion expecting an outperformance of between 3% and 6% over public market returns.