GAM Investments said Tuesday it has tied up with Liberty Street Advisors to provide its clients access to investments in late-stage privately owned companies.
Under the partnership, GAM plans to leverage Liberty Street’s expertise in private markets investing to provide access to a segment historically difficult for its clients to tap, the asset manager said in a press release.
«An increasing number of our clients are seeking to diversify their portfolios by including longer-term private asset investment strategies. In our view, privately-owned companies in their later-stage nonpublic funding rounds could offer investors strong long-term performance potential, while their historical downside resilience and low correlation to public equities also makes this asset class attractive for portfolio diversification,» Peter Sanderson, group CEO at GAM Investments, said in the statement.
Growth equity segment expanding
GAM’s clients include institutions, financial intermediaries and private investors; it has assets under management of CHF103 billion, or around $110.4 billion, as of end-September 2021.
The growth equity segment, which lives between venture capital and traditional private equity, has seen a sharp expansion, with more than 900 venture capital-backed companies valued at more than $1 billion, GAM noted.
Kevin Moss, a managing director at Liberty Street, said late-stage private growth companies can offer an attractive risk-return balance for investors, as compared with early-stage venture investments and public equities.
Staying private longer
«We are seeing companies stay private for longer, driven primarily by regulatory changes, ease of business model development in the private sphere and a larger pool of available private capital,» Moss said in the statement. «A significant portion of these companies’ value appreciation occurs prior to entry into the public markets, at mid or large cap size.»
Liberty Street Advisors, based in the U.S., managed seven mutual funds and an interval fund with total assets under management of more than $1.6 billion as of end-December.
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