- A new breed of highly experienced, entrepreneurial private equity experts is breaking away from the established managers and launching spin-off enterprises. They are smaller, nimbler and more able to deliver on the promise of superior risk-adjusted returns.
- Next-generation funds are, on average, one-third the size of established GPs in the same strategy. They will often only realise profits from the carry, as opposed to the management fees. Similarly, the size of the venture means that the managers have fewer portfolio distractions and fewer decision-making layers, allowing them to stay highly engaged with their investment teams.
- Federated Hermes next-generation strategy allows it to tap into the significant alpha opportunity in the less-known, less-covered, and less-price-efficient lower mid-market. We believe the most-compelling opportunities lie within founder-owned businesses.
For further information on Federated Hermes’ Private Equity capabilities, please click here.
Private Markets Insight Q3 2023
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