Claudia Zeisberger & Michael Prahl on LP’s Going Direct – Special Report Zürich

On May 27 the INSEAD Alumni Association Switzerland’s Zürich Chapter hosted an evening conference entitled, “LP’s [pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]There is no rule that says direct investing is good or bad, but there are ways to do it right and many ways to get it wrong.[/pullquote]Going Direct: Beyond Co-Investing to Direct Investing” at the historic Zunfthaus zur Saffran in the city centre. INSEAD’s Professor Claudia Zeisberger and Michael Prahl, who together lead the School’s six year old Global Private Equity Centre, spoke to an audience of more than 40 private equity professionals, as well as attendees from investment banks, corporate finance, family offices and law firms, about the latest trend amongst institutional investors to bypass private equity funds and invest directly into businesses in their search for above average returns.

Zeisberger has identified a Canadian pension fund that is a frontrunner in direct investing by Limited Partners (LPs), and developed it as a case for INSEAD. By analysing its approach and research data, comparing it over time with other institutional investors’ direct and co-investments, she and Prahl found certain success factors, challenges, and best practises which they shared. There is no rule that says direct investing is good or bad, but there are ways to do it right and many ways to get it wrong. LP have several options, such as pooling capital and working together with other LPs, sharing or outsourcing the work, or they can build the capability in-house, knowing that there is a need to dedicate resources and go up the learning curve, or find another solution that fits the LPs goals and capabilities.

Read the full reportLPs Going Direct Special Report June 2014 FINAL (pdf)

The presentation slides are available here.