US investment consultant, Meketa Investment Group, is witnessing an increase in interest in venture capital strategies, particularly at the late stage, as allocators look to harness their investments to early-stage opportunities.
US investment consultant, Meketa Investment Group, is witnessing an increase in interest in venture capital strategies, particularly at the late stage, as allocators look to harness their investments to early-stage opportunities.
Todd Silverman, Private Markets Consultant at Meketa, told Private Equity Wire: “We’ve seen a lot of capital formation around venture capital and growth equity strategies, but we’re looking to stay fairly disciplined as we build diversified portfolios.”
VC is an area in which Meketa has been active, but it is not a strategy the firm is necessarily looking to overweight immediately. Overall Silverman said demand for all private equity strategies continues to be very strong, particularly for high-quality, experienced asset managers.
Meketa has a long-term approach to private equity, investing its time in researching new and robust risk mitigation strategies, rather than being “overly-tactical.”
Despite taking their time when considering new strategies, Silverman commented: “We’re certainly reactive and responsive to things that are happening in the markets, but it’s a long-term evaluation. Any change to long-term strategy is very deliberate.”
Meketa manages a total of USD1.7 trillion AuA across all their clients. In private markets, the firm manages over USD125 billion in private market investments across private equity, private credit, infrastructure, natural resources and real estate.
Silverman noted: “We see managers creating value through sector specialisation and deep operational involvement.” He added that Meketa looks for managers by “casting a wide net” and assessing both the manager’s individual attributes, and matching it to their clients’ relevant investment appetites.
On other current opportunities, Silverman stated: “One thing that has shifted in terms of available opportunities has been growth within private equity, specifically the accommodative IPO deal market and the SPAC phenomenon.”
In recent months, Silverman mentioned that, though Meketa did re-visit expectations and modestly dial back 2020 budgets after the dislocation of Covid-19 and based off public markets declines, there was a rapid rebound in public markets. He explained that there has been a strong uptake in private equity commitment activity, despite Covid-19, and that “the asset class continues to deliver on the return premium for risk and illiquidity.”
