We believe that the diversification of investments by type, stage, sector, private equity manager, geography and vintage year is fundamental to managing risk as it ensures that the portfolio is not overexposed to any one segment of the private equity market. It also reduces the risk of any single company or fund that happens to underperform having an adverse impact on overall performance. PIP invests with a range of high quality managers across the world offering different investment strategies. At the same time, PIP seeks to manage the level of diversification in its portfolio so that over time, outperformance of individual investments can boost the overall return of the portfolio.

Find out more about PIP’s portfolio here.

By investing across funds of different ages, known as vintages, PIP is able to manage its cash flow, balancing investments into new funds with cash generated from the sale of portfolio companies. At the end of May 2024, the weighted average fund maturity was 5.2 years. This has been achieved by managing PIP’s investment pace to balance new investments across primaries, secondaries and co-investments. Primaries and co-investments provide exposure to younger vintages – which are typically in the value creation period – and secondaries provide exposure to funds which are typically in the “harvest” period.

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PIP is offered the opportunity to invest in the full range of private equity investments sourced for it by Pantheon. PIP invests alongside other Pantheon-managed funds directly into third party funds and underlying companies. This offers a number of benefits including:

  • Being able to remain nimble and in control of investment strategy; overseen by the Board.
  • Reduction of financing risk – PIP is able to accept or decline investments according to its financial resources at the time.
  • The flexibility to vary the size of its commitments as appropriate and in line with any adjustments to its investment strategy. It can also respond to the opportunities and challenges presented by prevailing market conditions.
  • Lower cost due to the elimination of expenses that can arise in intermediate vehicles.

Our ability to construct and maintain a resilient and well-balanced portfolio reflects the strengths of Pantheon’s relationships, experience and expertise.