On April 10 ^th , AOG held its third client education event for the year at the Ruth’s Chris restaurant in Tysons. The guest speaker for the event was Sean Nelson, director for the Client and Partner Group at Kohlberg Kravis Roberts & Co. ( KKR ). 

 Sean’s expertise in working with leading private wealth platforms, family offices, registered investment advisors, and high net worth individuals within the private equity industry allowed for some valuable insight about the business. Sean shared with the audience of accredited investors how private equity provides a quantifiable advantage to a diversified portfolio. Private equity’s historical track record of being able to cushion investors against severe market downturns in addition to the exposure to a much broader investment opportunity set were just a few of the benefits highlighted during the presentation. 

Investments by private equity firms into companies go beyond mere financial allocations and, in many instances, through extensive partnerships with management teams and change management, greater value can be created by improving productivity and creating growth. The ability of private equity firms to spread investments between the three categories of Primary (new funds), Secondary (more mature funds) and Co-investments (holding-by-holding investment alongside managers) gives them a great amount of flexibility to extract value from companies through various phases of the business cycle. The “J-curve” effect (negative returns in first few years of investing) associated with private equity can also be managed more effectively by allocating investments across the three categories listed above. Sean explained how KKR with its global reach can be very selective in filtering through thousands of investment opportunities and select only those that prove to be the most attractive.

Altegris has partnered with KKR to provide retail investors the opportunity to invest in this asset class through the Altegris KKR Commitments fund. Sean provided a very fitting analogy for how Altegris as the investment adviser is the restaurant, how the StepStone Group and its involvement as the sub-adviser acts as the chef, and KKR with their broad exposure and deal-flow origination can be seen as the groceries. All together, these various elements make for an interesting combination to deliver a quality private equity offering. 

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