The Most Consistent Names in Alternatives

The venture capital (VC) sector boasts the highest number of consistently outperforming fund managers, according to Preqin.

Nine groups recorded top-quartile performance for all their funds currently operating in the sector, the data firm said.

New York-based Pittsford Ventures’ six VC funds were all top quartile, Preqin found, while California’s Sequoia Capital had four top-quartile products. A further seven groups had a trio of top performers each.

Six buyout-focused managers also achieved 100% top quartile performance from their funds. These included London-based Inflexion and Austin, Texas-based Vista Equity Partners, which both had four out of four products in the top quartile.

For more stories like this, sign up for the CIO Alert newsletter. 

Preqin collated performance data from buyout, VC, mezzanine, real estate, infrastructure, and natural resources funds. The lists included only active managers with at least three funds in similar strategies, and firms that had been raising cash from investors within the past six years.

Measuring performance on funds launched before 2013, Preqin found 19 firms currently running three products or more in a sector had achieved top quartile performance each time.

In private real estate, Carmel Partners, Centennial Holdings, and Embarcadero Capital Partners achieved this feat, while Latin America Enterprise Fund Managers was the only group to have all its funds in the top quartile in the natural resources sector.

In contrast, infrastructure groups found it the most difficult to produce consistent top returns. The best performing group was Harbert Management Corporation, with three of its four funds in the top 25%. However, its fourth product was bottom quartile, giving an average quartile ranking of 1.75. Only one other infrastructure investor—Energy Spectrum Capital—managed an average quartile ranking below 2.00, Preqin found.

The US dominated the most consistent firms, with 15 of the 19 members of the 100% group based in America. In total, US firms made up 42 of the 55 companies named in Preqin’s research.

Most Consistent Buyout Managers

Northern Trust has hired a consulting veteran and a behavioral finance expert to bolster its growing defined contribution (DC) business.

Sabrina Bailey, who most recently led Mercer’s DC group, was appointed to a newly created position of global head of defined contribution.

Northern Trust also named Gaobo Pang, a former economist with Towers Watson and the World Bank, as senior behavioral finance specialist. He began his post in April, based in the Chicago office.

Stephen Potter, Northern Trust Asset Management’s president, said the new hires will be instrumental in continuing the firm’s move into the US retirement sector.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

The Chicago-based firm had $120 billion in DC assets under management as of June 30, including $7.5 billion in target-date vehicles.

“Bailey will be a strong, experienced voice at the helm of our global DC business,” Potter said, adding Pang will deliver “expertise that will enhance our understanding of investor behavior and translate that knowledge into innovative solutions for DC plan sponsors.”

During her two-year tenure at Mercer, Bailey headed up “deployment of innovative solutions and intellectual capital,” while advising the firm’s largest retirement plan clients, Northern Trust said. The new DC chief also led internal strategy, research, and client service committees.

Prior to Mercer, Bailey held senior consulting roles at Towers Watson and RogersCasey. She holds a bachelor’s degree and an MBA from George Fox University in Oregon.

Pang joined Northern Trust from Towers Watson, where for eight years he supervised research in corporate finance, portfolio optimization and management—particularly in retirement income solutions and target-date funds—and macroeconomic analysis, according to his LinkedIn profile.

He spent three years at the World Bank as an economist prior to his consulting position, focusing on macroeconomic policies, public debt sustainability, debt relief, foreign direct investments, and economic growth.

Pang holds a PhD in economics from the University of Maryland College Park and a master’s degree in finance from Tsinghua University in China.