Mercer Short Duration Fixed Income Fund Class Y-3 · NASDAQ:MSDYX
Mercer Short Duration Fixed Income Fund Class Y-3 — Mercer — Private markets webinar (March 2021)
34 slides from Mercer Short Duration Fixed Income Fund Class Y-3's conference presentation, Mar 30, 2021
Slide 1: The case for co-investments and secondaries
Private markets webinar The case for co-investments and secondaries Deborah Wardle Alternatives Investment Director Chason Beggerow Global Head of Co-investments and Secondaries Benjamin Baumann Partner, Co-investments and Secondaries March 30, 2021. For professional investor use only.
Slide 2: Welcome
@ Mercer Welcome @Mercer welcome to brighter
Slide 3: Mercer's alternatives platform
Mercer’s alternatives platform Co-investment and Secondaries Team Global Private Markets Investment Team* North America Europe Asia/Pacific 49 professionals 25 professionals 9 professionals c c c c c Chason Beggerow Benjamin Baumann Sam Gibbens Dusan Senderak Evy Carroll Felix Jaeger Global Leader P
Slide 4: Co-investments
Co-investments © 2021 Mercer LLC. All rights reserved. 4
Slide 5: Co-investments: The WHAT and the WHY
Co-investments: The WHAT and the WHY
Slide 6: Co-investments: What are they?
Co-investments What are they? Co-investments are private equity investments into a single company Why they exist? as opposed to a diversified blind • Co-investment opportunities arise pool portfolio such as a primary when a private equity manager private equity fund identifies an attractive transact
Slide 7: Reasons for considering co-investments
Define j curve (Becky stiff providing disclaimer) Reasons for considering co-investments Accelerated Potentially capital Diversification Potentially improved deployment/ and control lower fees net returns J-curve mitigation1 Closer Knowledge relationships transfer, Enhanced with investment transpare
Slide 8: Co-investments: Market universe and selection
Co-investments: Market universe and selection
Slide 9: Robust co-investment deal-flow
Robust co-investment deal-flow ~20% Europe ~75% ~5% North Asia/ America Pacific ~180 ~110 ~30 Co-investment Co-investments sourced Co-investments (deals and opportunities screened on from more than 110 projects) completed for a global basis General Partners globally advisory and discretionary in 202
Slide 10: Due diligence: key criteria
Due diligence: key criteria Investment Manager Investment Manager Quality Investment Manager Fit • Highly rated manager by Mercer • Strategy, structure, sector, geography and size • Established organization and track record • Relevant track record and experience (similar deals, co-investments) • Tea
Slide 11: Co-investments: Implementation considerations
Co-investments: Implementation considerations
Slide 12: Key factors for investors to consider in co-investments
Key factors for investors to consider in co-investments Broad and deep Efficient process and Need for discipline Other relationships with ability to execute, and consistency considerations investment managers dedicated resources Recognition that it is “co-investing” not “co-leading” © 2021 Mercer LL
Slide 13: Potential risks to consider
Potential risks to consider • In a portfolio with a more concentrated number of investments, a single investment’s returns can dominate performance, positively or negatively. • Concentration risk can happen across various dimensions (manager/industry/geography). The amount of Concentration risk capi
Slide 14: Common co-investment implementation options
Common co-investment implementation options Pros & Cons Resource Requirements + Simplified reporting Third-Party + Potential to pool deal flow + Ability to develop more fully diversified Co-investment portfolios • No additional resources required Manager - No discretion or ability to tailor - Additi
Slide 15: Co-investments: Case studies
Co-investments: Case studies
Slide 16: Case study: Co-investments with highly-rated investment managers
Case study Co-investments with highly-rated investment managers European Buyout • The investment manager is the global leader in the design, engineering and production of digital sound mixing consoles . • The company combines hardware and proprietary software into mixing and processing equipment for
Slide 17: Secondaries
Secondaries © 2021 Mercer LLC. All rights reserved. 17
Slide 18: Secondaries: The WHAT and the WHY
Secondaries: The WHAT and the WHY
Slide 19: Secondaries: What are they?
Secondaries What are they? A secondary private equity investment occurs when an interest in a private equity fund or position is transferred by an existing investor to another investor. They can provide liquidity to investors and investment managers in a traditionally illiquid asset class. Secondary
Slide 20: Motivation of secondary sellers
Motivation of secondary sellers A broad array of factors motivate investors to actively manage their private investment portfolios Portfolio Exit specific Administrative GP-Led Management Investments needs • Address asset allocation • Exit/reduce exposure to • Reduce number of asset • Generate liqui
Slide 21: Benefits of secondary transactions
Benefits of secondary transactions J-curve Reduce ‘blind Faster mitigation pool’ risk exposure build-up Demonstrated Additional Leverage Risk/Return Diversification network Profile © 2021 Mercer LLC. All rights reserved. 21
Slide 22: Secondaries: Market
Secondaries: Market
Slide 23: Secondary Transaction Volume
Secondary Transaction Volume COVID-19 Annual Secondary Transaction Volume Pandemic (USD billions) $85 $74 Global Financial Crisis $621 $58 $42 $40 $37 $28 $25 $25 $23 $20 $10 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sources: Greenhill, Setter Capital, Commonfund, Mercer Analy
Slide 24: Seller Composition
Seller Composition Seller Composition FY 2018 FY 2019 FY 2020 2%4% 3% 2% 17% 5% 3% 13% 15% 25% 27% 8% 0% 27% 16% 0% 1% 29% 23% 13% 10% 5% 9% 7% 5% 6% 5% 6% 4% 10% Source: Setter Capital Volume Report FY 2018, FY 2019 and FY 2020 © 2021 Mercer LLC. All rights reserved. 24
Slide 25: Historical market pricing
Historical market pricing Historical Secondary Pricing (% of NAV) 105% 99% 100% 96% 95% 97% 94% 93% 93% 95% 91% 92% 92% 93% 90% 89% 92% 88% 90% 87% 89% 84% 90% 88% 88% 87% 87% 85% 79% 83% 83% 85% 80% 83% 83% 74% 81% 75% 79% 78% 77% 75% 70% 73% 2012 2013 2014 2015 2016 2017 2018 2019 2020 Buyout Vent
Slide 26: Secondaries: Implementation considerations
Secondaries: Implementation considerations
Slide 27: Key factors when investors considering secondaries
Key factors when investors considering secondaries Dedicated Data Access to Structuring resources management deal flow expertise Effective investing into secondaries is resource intensive and requires specific skills © 2021 Mercer LLC. All rights reserved. 27
Slide 28: Secondaries: Case studies
Secondaries: Case studies
Slide 29: Case studies: Private Equity and Real Assets
Case studies Private Equity and Real Assets US Venture Capital – Structured fund portfolio GP-led infrastructure investor stake companies • One of the leading life science venture • Highly structured deal set up by this • GP-led secondary transaction with the capital firms. investment manager. aim t
Slide 30: Q&A
Q&A © 2021 Mercer LLC. All rights reserved. 30
Slide 31: For further information about our investment solutions
For further information about our investment solutions, please visit https://www.mercer.com/what- we-do/wealth-and-investments/alternative- investments.html Please send us any questions by email to MercerInvestmentSolutions@mercer.com
Slide 32: Important Notices
Important Notices References to Mercer shall be construed to include Mercer LLC and/or its associated companies. © 2021 Mercer LLC. All rights reserved. This contains confidential and proprietary information of Mercer and is intended for the exclusive use of the parties to whom it was provided by Me
Slide 33: Important Notices
Important Notices This presentation is for sophisticated investors only who are accredited investors and qualified purchasers. Funds of private capital funds are speculative and involve a high degree of risk. Private capital fund managers have total authority over the private capital funds. The use
Slide 34: welcome to brighter
welcome to brighter