We believe that private equity manager selection is critical to generating healthy risk-adjusted returns in PIP’s portfolio over the long term. A manager’s likely future performance can be assessed by analysing their organisation, detailed past track record, investment strategy and competitive positioning.

However, selecting and investing with the best managers requires skill and experience. Through its access to Pantheon’s platform, PIP benefits from the powerful blend of market-leading intelligence to identify and monitor the best managers, as well as the longstanding and deep relationships to secure access to them.

Our private equity manager selection is underpinned by a rigorous and thorough due diligence process. This entails deep scrutiny of the organisation, track record and strategy of the manager. The impact on the overall blend of PIP’s investments, including a sharp focus on diversification, is also assessed on a case by case basis.

PIP benefits from Pantheon’s bespoke portfolio analysis tool for evaluating a manager’s underlying assets. Highly valuable information and insight is drawn from this, including performance analysis of current and past investments, as well as key portfolio metrics.

  • Identify key capabilities and drivers of success:

    • Decision making dynamics
    • Robustness of systems and processes
    • Business culture
    • Manager life cycle
    • Succession

  • Detailed assessment of the manager’s track record, applying propriety tools:

    • Understand value creation mechanisms
    • Identify contribution of key individuals and sector, stage and geography exposures
    • Cross-reference track record with proposed strategy

  • Develop a view on effectiveness and relevance of the private equity manager’s strategy:

    • Evaluate manager’s skill-set and assess ability to deliver strategy according to plan
    • Benchmark manager against relevant peer group
    • Identify threats to successful execution of stated strategy

  • Assess investment fit with portfolio and impact on diversification by:

    • Industry
    • Geography
    • Stage
    • Sponsor
    • Vintage year
    • Evaluate alternative private equity managers to ensure optimal portfolio fit

Find out more about Pantheon’s detailed investment process here.

Pantheon’s scrutiny of our private equity managers does not stop after the initial investment. The same rigour and detailed analysis takes place throughout the investment cycle with performance at a fund and portfolio company level continuously monitored.

One of the key benefits of this active and thorough approach is that it highlights emerging issues allowing for pre-emptive action. The action taken by Pantheon in response will vary according to the circumstances, but will typically include engaging with the manager to understand and agree how a specific issue is to be addressed. Pantheon’s position on 674 advisory boards (as at 30 September 2024) of its private equity managers offers an additional level of scrutiny and access to information.

PIP’s systematic approach to manager selection and ongoing scrutiny is based on years of experience and expertise. One of PIP’s key strengths is our ability to mitigate risk while maximising capital growth over the long term.

PIP also focuses on managing environmental, social and governance (“ESG”) risks within its portfolio. Pantheon is committed to the integration of sound ESG principles in its pre-investment due diligence and post-investment monitoring processes.

Find out more about our approach to responsible investing here.