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Macquarie Funds Management’s private equity investment process aims to produce consistent performance through disciplined portfolio construction and manager selection.
Our six-step private equity manager selection process is described below.
Step 1 - Market review
Our alternative investment team proactively monitors the private equity universe looking for those opportunities that it believes best meet the risk/return characteristics of its clients.
Step 2 - Preliminary evaluation
We consider four broad investment criteria during the preliminary screening:
Step 3 - Due diligence
Once a fund passes preliminary evaluation, the Alternative Investment team undertakes a comprehensive and wide-ranging due diligence review of the fund. The process involves site visits to the manager’s offices, and a detailed review of the manager’s track record including analysis of individual investee company experiences.
Step 4 - Investment recommendation
When the due diligence review has been completed the team presents the findings and recommendations to Macquarie Funds Management’s Alternative Investment Committee. The Committee reviews investment recommendations to ensure that the investment process has been adhered to.
Step 5 - Investment
We negotiate each investment with the relevant manager while pursuing alignment of interests between the manager and the investor.
Step 6 - Monitoring
We closely monitor the underlying manager and fund during the term of the investment, through regular visits and updates. We seek to remain appraised of a manager’s investment activities, allowing us to form an opinion on the overall risk levels of a fund, the ongoing integrity of a manager’s investment strategy and investment professionals as well as the private equity market environment.
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