On April 10th, 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.
This material should not be considered a solicitation of an offer to sell/buy any specific security or offering. Investors are advised to consider the investment objective, risks, charges and expenses of an offering carefully before investing.
Alternative Investment Funds represent speculative investments and involve a high degree of risk. An investor could lose all or a substantial portion of his/her investment. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment in an Alternative Investment Fund. Any investment in Alternative Investment Funds should be discretionary capital set aside strictly for speculative purposes. Alternative Investment Fund offering documents are not reviewed or approved by federal or state regulators. Some Alternative Investment Funds may have little or no operating history or performance and may use hypothetical or pro forma performance which may not reflect actual trading done by the manager or advisor and should be reviewed carefully. Investors should not place undue reliance on hypothetical or pro forma performance.
These securities have not been registered under the Securities Act of 1933 and are only made available to individuals who meet certain minimum requirements as an “accredited investor” under SEC Rule 501(a). Investors that do not meet these minimum standards are not eligible to participate in Regulation D offerings.