Private market asset managers and service providers are snapping up talent in their push into private wealth’s fundraising channels.
The most active recruiters of private-wealth capital-raising talent last year were Apollo, Blackstone, Ares, KKR and EQT, according to data from Jensen Partners, an executive search firm. The data also showed a 115% year-over-year increase in the hiring of capital-raising private wealth professionals at alternative asset managers from 2021 to 2022.
On Tuesday, Carlyle appointed Franklin Templeton alumnus Shane Clifford to head the firm’s private wealth strategy. Clifford is tasked with growing Carlyle’s private wealth business in private equity, credit and investment solutions; in particular, he is responsible for identifying capital raising opportunities in private wealth.
With typical institutional dollars becoming more limited, asset managers are tapping into private wealth and other alternative pools of capital. In 2021, Blackstone announced plans to double its private wealth solutions business, and in May of this year, Apollo launched Apollo Private Markets SICAV, two semi-liquid funds that offer its private wealth clients private market exposure.
“Firms are making a concentrated push,” said Francois Auzerais, senior client partner at Korn Ferry, a consulting and executive search firm. “It’s a byproduct of some of the difficulties and challenges of raising institutional capital and figuring ways to diversify your capital-raising base.”
Wealthy individuals and families want exposure to private asset classes that have historically generated outsized returns for large institutional portfolios. Asset managers grappling with a challenging fundraising environment are more than happy to expand the scope of their fundraising Rolodex. In a Goldman Sachs survey of 166 family offices, 41% of respondents said they plan to increase their target strategic allocation to private equity in the next 12 months.
Rothschild & Co. is one of the firms betting this trend continues. In May, Rothschild formed a private markets group in its asset and wealth management division,
with firm veteran Jessica Sellam at its helm.
“There is a growing appetite amongst individual investors to invest in private markets,” said François Perol, Rothschild managing partner.
While Rothschild’s new unit will cover several private asset classes, private equity remains the main part of its portfolio diversification strategy, comprising around 60% to 65% of its allocations, including secondaries and co-investments. In private equity, Sellam said the firm invests from growth to buyouts that range from small to large-cap.
“80% of companies are unlisted, so if you want to be exposed to the economy now, you don’t have a choice—you have to invest in private markets,” she said.
In her early years at Rothschild, Sellam developed private equity and direct lending products for private wealth clients. Over the past two decades, she climbed the ranks, leading the private markets and business development teams for France, Belgium and Monaco.
The private markets grew in tandem with Sellam’s ascent in the firm. In 2008, private capital fundraising reached a total of $782.5 million. By the end of 2022, that sum was around $1.2 billion, according to PitchBook data.
On the LP side, family offices—typical private wealth clients—have shifted asset allocation strategies in search of more private market exposure: Respondents to UBS’ recent global family office survey said they plan to increase their private equity exposure by 41% via direct investments and 35% through funds and funds-of-funds.
Related reads: PitchBook’s Q1 2023 Global Private Market Fundraising Report
Featured image by ADragan/Shutterstock
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