January 12, 2023
Key Takeaways
1. Venture capital is an important driver of returns for leading endowments. Accessing venture capital managers that are likely to outperform takes time, networks, and expertise which create significant barriers to entry for individuals and small investors.
2. Investing on behalf of mission-driven organizations has resonated with the venture capital community. The top managers often have a stable group of existing investors, and are only willing to add new investors if they support values-aligned missions. At GEM, our clients are a key differentiating aspect in this regard and something we are proud the investment community recognizes.
3. Selection is critical. Top quartile venture capital firms have added at least 14% above the S&P 500®, but the median fund has beaten the S&P by merely 2%.
Head of Investments Jay Ripley joined Ted Seides on the Capital Allocators podcast to discuss his path from private equity to GEM, the firm’s approach to backing emerging managers and independent sponsors, and the importance of strong manager selection amid growing dispersion.
Strong returns from leading university endowments have reignited discussion about how institutions can sustain performance in a shifting market environment. In commentary for The Wall Street Journal, GEM’s Co-CIO, Matt Bank, reflects on how endowment leaders are preparing for more uncertain conditions ahead.
In a recent Q&A with Buyouts’ Chris Witowsky, GEM’s Caroline Dallas, a Director in our Investment Research Group, shared her perspective on how recent private equity market shifts are influencing talent dynamics, emerging manager activity, and LP appetite across the lower mid-market.
Let’s start a conversation about how we can help.
