Press Release April 2021 Truffle Announces StepStone as Strategic Research Partner Truffle Invest (“Truffle”) is pleased to announce its strategic alliance with StepStone Group (“StepStone”) whereby StepStone becomes Truffle’s research partner. David Jeffrey, Partner & Head of Europe at StepStone, joins Truffle’s Strategic Advisory Board. The relationship: Combines StepStone’s market-leading private markets research with Truffle’s expertise at delivering private markets programs for multi-family offices and wealth managers. Leverages StepStone’s 200+ investment professionals and proprietary due diligence and analytics tools to support Truffle’s investment manager selection and due diligence processes globally. Enhances Truffle’s offering to clients. Truffle focuses on delivering bespoke solutions combining private markets investments, structuring and technology to multi-family offices and wealth managers. StepStone is a global private markets firm focused on providing customized investment solutions and advisory and data services to its clients. As of December 31, 2020, StepStone oversaw approximately $333 billion of private markets allocations, including over $80 billion of assets under management. StepStone’s clients include some of the world’s largest pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients. Jason Proctor, Managing Director of Truffle, commented; “StepStone is a market leader with regards to [...]
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Press Release March 2021 Truffle signs Cornerstone Investors and passes EUR 100m of Assets Truffle announces; Cornerstone Investors Commitments to several leading Private Markets Funds Total assets exceed EUR 100m Private markets specialist Truffle Invest (“Truffle”) has signed agreements with European family offices to become cornerstone investors of Truffle. The family offices, representing successful entrepreneurs, were seeking a private markets solution that offered greater flexibility and customisation than is typically available in the market for private investors. As of December 31, 2020 Truffle’s total capital has also passed the EUR 100m mark, which includes a number of recent commitments to leading private markets funds. Recently closed investments include: Nordic Capital Fund X EQT IX Coller International Partners VIII Truffle is continuously sourcing and reviewing investment opportunities. The 2021 pipeline is exciting and includes a range of international private equity funds (small/mid/large buyout & growth across Europe, North America & Asia). Truffle is also working on a private debt solution which provides clients instant exposure to a diversified portfolio of attractive yield-generating senior loans. Lastly, Truffle is actively exploring impact investing strategies across the private market spectrum. Jeroen Afink, Managing Director of Truffle Invest, commented; "We are excited to actively commit [...]
Press Release March 2021 Truffle opens Amsterdam office, led by former ABN AMRO Private Equity Specialist Private markets specialist Truffle Invest (“Truffle”) has recently opened its Amsterdam office, to better serve its growing client base in the Benelux region. The Amsterdam office is being led by Jeroen Afink, who joins Truffle as Managing Director having previously launched private equity investment programs at ABN AMRO. Jeroen, who has also joined Truffle’s Investment Committee, has over 20 years’ experience in global investment management and exclusively focused on private markets for the last 11 years. Truffle – a B2B focused private markets solutions provider – forms partnerships with wealth managers and family offices to provide their end-clients with access to private equity, private debt and real assets funds worldwide. Truffle is on the buy-side and undertakes manager selection, due diligence, portfolio construction and management combined with a suite of structuring solutions across jurisdictions. Independent – Truffle is an independent private markets firm, allowing wealth managers and family offices to enhance and control their client relationships; Access – Truffle provides clients with access to wide range of curated, high quality private markets funds covering private equity, private debt, venture capital and real assets; Modular [...]
Press Release February 2021 Truffle Invest and Delio form strategic partnership to offer modular access to private markets funds Private markets specialist Truffle Invest and award-winning fintech Delio have formed a strategic partnership to offer a modular private markets funds solution to the wealth management industry. The partnership combines Delio's market-leading technology solutions with Truffle's expertise in building private markets portfolios. By joining forces, they will now offer a bespoke private markets solution for banks, wealth managers and multi-family offices across Europe and beyond. The new proposition will integrate services spanning product, structuring and technology and can be configured in line with a wealth manager’s specific objectives. The services build on the experience of Truffle’s team in the institutional investment space, where they have helped some of the world's largest and most sophisticated investors with their private markets portfolios. Replicating these investments in private investor portfolios is often a complex challenge for wealth managers due to the specialist expertise required to access leading funds, construct portfolios, undertake due diligence and structure investments in line with regulatory considerations. Truffle is a buy-side participant in the market, acting on behalf of its wealth manager partners. As a result, Truffle are offering access [...]
Recent events have created a significant opportunity in private markets for proactive investors. Historically the best performing private markets vintages have been in the years following significant market volatility; most recently the 2008 Global Financial Crisis and the bursting of the tech bubble of the early 2000s. Whilst the outlook for private markets broadly is likely to remain very attractive for the next few vintages, the immediate opportunity set is most concentrated within opportunistic distressed debt strategies. Whilst it remains early days, the indications are that a substantial distressed opportunity is emerging with experienced and well-resourced distressed debt funds well placed to generate strong returns for investors. What is Distressed Debt? Distressed debt investing is a term used to cover a wide range of different strategy types, though the common theme is an underlying debt security that is either widely expected to default, or has already defaulted. This can include both public and private instruments issued by corporates or backed by assets such a real estate or other hard assets. Distressed debt investors seek to buy these loans and bonds at significant discounts to their par value in order to benefit from either; (i) a [...]
In the last couple of years, you would have been hard-pressed to find a market participant who did not say that they were expecting the market cycle to turn soon – though perhaps nobody anticipated the nature of the events that have played out during the first quarter of 2020. In this note we look at how private markets’ performance has varied across prior cycles, including the significant changes in performance dispersion across different periods. We will return to some of these themes in more detail in future notes. Whilst not the focus of this note, on most measures private equity has delivered consistently strong performance across vintage years both relative to public markets and on an absolute basis. In the current market environment, what is of more interest is the variation of vintage performance in relation to the two most recent major global economic cycles; the “Dot Com” bubble of the early 2000s, and the global financial crisis of 2008 (the “GFC”). The chart below shows the performance of private equity funds on a global basis by vintage year. Of course, given the drawdown nature of private markets funds, a private equity fund would typically [...]
An investment in a traditional liquid fund generally involves only two cash flows; the initial investment and proceeds on sale of the investment. Private equity funds are different – this article explains the typical cash flows that occur during the life of a Private Equity fund. This is for illustrative purposes only, actual performance and cash flows will vary. Past performance is not indicative of future returns. Initial Investment – With Truffle, your investment is fully funded upfront. This means that investors do not have to worry about having capital available at short notice to meet capital call payments from the underlying fund. Investment Period – This period, which is typically 4 or 5 years for a Private Equity fund, is where the fund manager makes its investments; i.e. buys companies as per its target strategy. Distribution Period – Following the end of the investment period, a fund will have the remainder of its life, usually 10 years in total (including the investment period), to sell (or “exit”) its investments. Following a sale of a company, the proceeds from that sale are returned to investors. Consequently, investors may expect to receive distributions from approximately year 5 [...]
Persistence of performance of Private Equity fund managers has been a topic of much industry and academic research. Whilst past performance is not indicative of future returns, there are some significant trends that investors should be aware of when selecting Private Equity fund managers. Quartiles Explained: The analysis shown here is based on quartile performance, a standard approach for measuring the performance of a Private Equity fund relative to its peers. This involves ranking all funds in the data set from top performers through to the lowest performers, and grouping them into “quartiles”. Top quartile funds are therefore the top performing 25%, whereas 4th quartile funds are the lowest performing 25%. Outperformance Persists Top performing funds tend, more often than not, to be followed by a fund that also outperforms. For example, 74% of top quartile funds are followed by a fund that has outperformed (i.e. in the top two quartiles). Less than 10% of funds following a top quartile fund are in the bottom quartile. Source: The Journal of Performance Measurement, Fall 2017. Notes: Percentage of large buyout funds that transition from a previous performance quartile to each current fund quartile. Results [...]
There is a significant body of research that suggests that over the long-term, Private Equity has on average outperformed public equity. However as an actively managed investment strategy, there is significant dispersion between the performance of Private Equity funds, and there is no investable benchmark or ETF. Note that past performance is not indicative of future returns. Outperformance of Public Equity When the average performance of Private Equity funds is compared to public equity market performance, Private Equity can be seen to outperform in most vintages. This analysis is made on a Public Markets Equivalent (“PME”) basis; this involves modelling the return that would have been generated in public markets if the same cash flows were invested as the actual private equity cash flows. Using data from Pitchbook Benchmarks, the average Private Equity fund has outperformed public equity markets (as measured by the S&P 500 index) in 75% of the vintage years from 2001 to 2016 (note that 2017 and 2018 vintage funds are still too immature to be included in the Pitchbook private equity benchmarks). Reasons for this outperformance can vary, though most market participants would point to the so-called “illiquidity premium”, a theoretical [...]