Private equity investments have become increasingly important portfolio allocations to many investors as they seek new sources of alpha and yield. Since 2000, the PineBridge Private Funds Group (PFG) team has focused on offering our clients access to market areas where we believe there is an attractive opportunity for potential outperformance – like the middle market.
The PFG team focuses on the broad middle market, which includes primary partnership sizes below US$2 billion, and secondary and co-investments generally less than US$100 million.
More than US$17.3 billion committed in the private markets since 2000
500-plus limited partnerships, with more than 300 distinct general partner (GP) relationships
Nearly 100 advisory board seats across the portfolio
17 dedicated private fund investment professionals located in New York, Mexico City, Hong Kong, Zurich, Mumbai and London
As of 31 December 2022. Includes all current investments within a fund/account managed by the PineBridge Private Funds Group.
While many firms focus on the middle market, we believe there are few of our size that have the breadth to provide primary, secondary, and co-investment capital to funds and companies in both developed and emerging markets. We provide customized solutions that aim to create global midmarket portfolios using various strategies to achieve targeted risk and return profiles.
Managing Director Peter Hwang, who specializes in Asia private equity and is based in Hong Kong, believes the opportunity Asia offers to private investors has been abundant but involves a wide variety of considerations – and these factors vary from country to country, requiring embedded professionals to wade through the nuances. “There is no such market as ‘Asia,’” Hwang says. “Each country is distinct and requires its own strategy. Investors need to be on the ground to build a strong relationship network, aiming to fuel a successful deal pipeline.”
The PFG team has been in the region since 2007 and has seen these markets grow and mature. “Over the years, we’ve sharpened our focus and believe our local presence in these markets has given us an edge, allowing us to source and execute on local opportunities,” Hwang notes.
Steven Costabile, Managing Director and Global Head of the Private Funds Group, agrees. “In my opinion, being smaller has enabled us to think outside the box and be more creative as we construct portfolios,” he says. “I believe we have been able to execute opportunities and solutions that some of our bigger competitors simply could not, while staying true to who we are.”
The use of leverage, the supply of capital flowing into the markets, and the path of inflation are perennial client concerns. While top-line growth is sought after, private equity investments tend to be longer-term and less liquid. This means origination and due diligence capabilities become even more critical in evaluating the risks and value creation potential of an opportunity.
As part of that assessment, in the first quarter of 2022, the PFG group completed its third annual ESG survey of general partners with whom the firm maintains an active relationship. This year our survey once again focused on diversity and inclusion (D&I) initiatives, given the growing attention to gender and racial equity issues.
Findings from the survey showed progress in several key areas, pointing to a forward-looking recognition that D&I initiatives are critical to remain competitive and growing momentum behind these efforts. While there’s much work left to be done, we think positive change is afoot.
The PFG team views these surveys as one way to enhance the dialogue about ESG issues that are important to our firm and to our clients. The results have been eye-opening as to where to focus our efforts, and the team looks forward to partnering with GPs to further move the needle on ESG-friendly practices.
Collaboration is a key differentiator for PineBridge’s PFG team. While the group works with vast amounts of data to assess its markets, collaboration among teammates across the globe is key to ensuring an objective approach. The active garnering of different points of view is especially critical when assessing challenging market developments such as Brexit or the European Debt Crisis of 2012, when team members in different parts of the world can offer distinct and valuable perspectives and experiences.
Collaboration is critical to the team on many levels – and because collaboration is at the core of PineBridge culture, it’s easy to achieve, whether our colleagues are across the room or across the globe. “In my opinion, it’s so easy to access the expertise across our firm,” says Hwang. “I can just walk across the floor or pick up the phone and connect with a colleague on our equity or fixed income teams. I believe that adding the input of local analysts in our network means we leave no stone unturned.”
The global PFG team collaborates to connect the dots across sectors and geographies and aims to make access to information fluid across the platform – and ensuring that each team member is able to share their expertise and experience whenever it’s needed.
But collaboration doesn’t mean conforming to a firmwide “view” or prescribed way of doing things. “Clients want a firm with an institutional process, but not one that bluntly enforces a house view,” says Costabile. “At PineBridge, we are able to have our own points of view and execute the business in the way we believe is best. I believe large competitors are less likely to do this.”
He continues, “We believe people learn more by being involved in the process, so we strive to expose all of our junior talent to our broad platform and encourage them to ask questions. We expect our junior people to be able to take the information they’re given, analyze it, and draw their own conclusions. We believe this makes our team better at what we do.”
When asked what differentiates the PFG team from its peers, Costabile says, “We provide access to the resources of our team and that of PineBridge in a comprehensive way that we believe our larger competitors cannot.”
This material was prepared by the Private Funds Group (“PFG”) for distribution to certain permitted contacts of PFG for educational purposes only. This report is not an advertisement and is not intended for distribution, commercial use or the general public. This is not an offer to sell or solicitation of an offer to purchase any interest in any investment fund or product. It may not be forwarded to any other person or entity. It is not a product of PineBridge Investments. In addition, the views expressed do not necessarily reflect the opinions of any other investment professional at PineBridge Investments, and may not be reflected in the strategies and products that PineBridge offers. Benchmarks are used for illustrative purposes only, and any such references should not be understood to mean there would necessarily be a correlation between investment returns of any investment and any benchmark. Any referenced benchmark does not reflect fees and expenses associated with the active management of any investment. Opinions expressed herein may differ from the views or opinions expressed by other areas of PineBridge Investments. It should not be assumed PineBridge will make investment recommendations in the future that are consistent with the views expressed herein, or use any or all of the techniques or methods of analysis described herein. PineBridge Investments and its affiliates may have positions (long or short) or engage in securities transactions that are not consistent with the information and views expressed in this document. Information from third party sources has not been independently verified. Any opinions, projections, forecasts and forward-looking statements are speculative in nature; valid only as of the date hereof and are subject to change. PineBridge Investments is not soliciting or recommending any action based on this information.