More investors are joining matchmaking services online to
access sought-after funds of funds and deals involving
secondary stakes, but theres only so much transparency
they can expect to find instantly.
While websites run by Palico and Artivest are increasing in
popularity, their full potential is limited by federal
regulations that prohibit private companies from listing asset
prices in public, according to Antoine Drean, founder of Palico.
Buyers and sellers that connect online must communicate about
asset prices by phone or through private messages sent on the
You cannot talk to the whole market at once,
said Drean, but a web-based platform quickly gives a broad view
of who is looking to make a deal. Palico began in 2012 matching
asset allocators with private-equity firms, as well as
investors seeking to buy or sell stakes in buyout funds. KKR &
Co.-backed Artivest, which matches investors with funds of
funds in the hedge-fund and private-equity industries, is
similarly attracting allocators who want more transparency.
Having a clear, full view of the market is a big deal to
institutional investors, who remain dissatisfied with the
transparency they receive from private-equity firms, according
to data room provider Intralinks. More than half the limited
partners in its survey this year said they were only
somewhat satisfied with the transparency they receive
from fund managers about investment performance.
Private equity is only 1.5 percent of financial global
assets, Drean said. Our bet is that this 1.5
percent will grow to five percent to 10 percent over the next
five to 10 years. This is really just the beginning.
[II Deep Dive: Co-investments in Private Equity Rise Along
Palico has more than 3000 accredited limited partners from
more than 1900 firms as members, plus more than 5000 accredited
private-equity managers, according to a spokesman for the firm.
Artivest, which was founded in 2012, received a round of funding from private-equity firm KKR and
venture-capital investors including Peter Thiel in 2015.
An investment platform helps you quickly get up to
speed, said Michael Kosoff, director of investment
research at Artivest. He said the firm is gaining traction in
the marketplace because its technology and user interface make
the allocation process easier.
Palico sees itself making the market more efficient by
collecting information on investment preferences before
Its not just a question of reaching out
manually, its also a question of making sure youre
talking to the right people, Drean said.