Despite the volatility of the past 18 months, for Adams Street Partners, it’s largely been business as usual. As a global organisation, the firm had measures in place that allowed it to quickly transition to remote work. Perhaps contradictory to expectations, the pandemic has created tailwinds in certain sectors that have presented great opportunities for the business, according to Kelly Meldrum, CFA, Partner & Head of Primary Investments at Adams Street.
Despite the volatility of the past 18 months, for Adams Street Partners, it’s largely been business as usual. As a global organisation, the firm had measures in place that allowed it to quickly transition to remote work. Perhaps contradictory to expectations, the pandemic has created tailwinds in certain sectors that have presented great opportunities for the business, according to Kelly Meldrum, CFA, Partner & Head of Primary Investments at Adams Street.
Meldrum explains: “The big change was conducting virtual due diligence, but we quickly adapted. As a result of our sourcing efforts, we started March 2020 with a robust pipeline of opportunities with existing managers that we knew very well, so the shift to virtual meetings was manageable. The firm increased reference checks completed on deals, reviewed portfolios and companies to assess the impact of Covid-19 and, whenever possible, safely met with its GPs in person.”
Meldrum notes: “Early in the pandemic, we were impressed by the swift action taken by many PE-backed portfolio companies. Strong operational capabilities are a key differentiator in good times and challenging times.”
Adams Street’s current investment strategies include private credit, co-investments, growth equity, secondaries and primaries. They also work with clients to build custom solutions specifically calibrated to meet their risk/return requirements.
Investing in change
Adams Street targets sectors that it believes are undergoing dislocation, change and growth. Its four core investment themes are software and technology, enabled services, healthcare, Changing Consumer Preferences and Industrial.
Meldrum says: “Our portfolio historically has been overweight in software and technology enabled services and healthcare. Those sector trends have accelerated since Covid-19; technology is no longer a vertical industry, it is table stakes in nearly every industry and we believe we were well-positioned to take advantage of a selection of these opportunities.”
On building on this performance, Meldrum says the firm will continue to focus on its four themes, as well as on funds and companies that have operating resources to grow the business. One of the keys to performance in private markets is to capture a larger share of the minority of private companies that outperform their competition. The firm targets managers it thinks can identify those companies to achieve better outcomes.
Meldrum adds: “We look forward to reviewing opportunities in impact investing in private markets and are looking to expand our private credit capabilities, with an emphasis on Europe. We are also seeking out opportunities to invest in blockchain technologies and cryptocurrencies.”
Regarding industry trends, Meldrum mentioned the firm’s participation in ‘heritage’ or smaller funds which have been launched over the past few years. “One current trend is strong franchise GPs building on their successful platforms and expanding their product offerings,” she explains.
ESG demand
She also emphasised the significance of ESG in the industry, and how the firm has seen an increased demand and interest regarding sustainable investing from its clients.
Meldrum concludes: “Adams Street has been incorporating ESG factors in diligence for over a decade and has been a UNPRI signatory since 2010. As ESG becomes an even more important component of diligence, the firm will continue to add resources and tools required to measure and report results.” 
Kelly Meldrum, Partner & Head of Primary Investments, CFA, Adams Street Partners
Kelly Meldrum focuses on the global primary portfolio and is currently responsible for many of Adams Street’s general partners, including Accel, Benchmark, Berkshire and TA Associates. Meldrum’s previous experience includes Director of Private Equity for the William and Flora Hewlett Foundation and investment roles at Hewlett-Packard Corporation and Morgan Stanley & Company, Inc. In addition, she sits on advisory boards for 10 private equity firms within Adams Street’s portfolio. Meldrum is Chair of Adams Street’s Primary Investment Committee and a member of the Executive Committee.
