“I’ve got liquidity problems.”
This phrase has become a badge of honour among large-cap fund managers; a self-deprecating gloat that they’ve outgrown the market and become a victim of their own success.
While liquidity problems do infer historical success at fundraising or growing capital, they don’t portend future success. Liquidity pressures prevent one from achieving the asset allocation they would otherwise intend, and realising the entry and exit prices they would otherwise deserve.
Within the private equity space, Australia’s superannuation funds and large private equity funds are just as exposed to liquidity problems - albeit with different nuances. And it’s costing them in opportunities and performance.
In this piece, we run through the problem facing large superannuation and private equity funds, before highlighting the performance they’re missing out on in the small and middle markets – just the part of the market Schroders Capital plays.
Download the full paper