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How Investors can Access Private Markets
Juliana Hadas, alternatives investment strategist, discusses how investors can access private market strategies and how the main types of vehicles – drawdown and evergreen structures – work.
Disclosures
Alternative Investments – Alternative Investments are subject to less regulation than other types of pooled investment vehicles such as mutual funds. Alternative Investments may impose significant fees, including incentive fees that are based upon a percentage of the realized and unrealized gains and an individual’s net returns may differ significantly from actual returns. Such fees may offset all or a significant portion of such Alternative Investment’s trading profits. Alternative Investments are not required to provide periodic pricing or valuation information. Investors may have limited rights with respect to their investments, including limited voting rights and participation in the management of such Alternative Investments.
Alternative Investments often engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested. There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. Similarly, interests in an Alternative Investment are highly illiquid and generally are not transferable without the consent of the sponsor, and applicable securities and tax laws will limit transfers.
Conflicts of Interest – There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. These activities and interests include potential multiple advisory, transactional and other interests in securities and instruments that may be purchased or sold by the Alternative Investment. These are considerations of which investors should be aware and additional information relating to these conflicts is set forth in the offering materials for the Alternative Investment.
The risks of an investment in a product comprising leveraged acquisitions, reorganizations, and private equity situations arise both from the risks associated with investments in leveraged acquisitions, reorganizations, and private equity situations, as well as from the risks attendant to such product’s ability to achieve its investment objectives. These risks will be described more fully in such product’s Private Placement Memorandum. Investors should be aware that the business of investing in leveraged acquisitions, reorganizations, and private equity situations is highly competitive. The results of the earlier investment partnerships organized by Goldman Sachs & Co. LLC or Goldman Sachs Asset Management, including GSCP 2000, GSCP V, GSCP VI, WSCP VII and WSCP VIII were made at different times and in different environments, and are not indicative of the results that any current or future investment product may achieve. An investment product may make a limited number of investments. A consequence of a limited number of investments is that the aggregate returns realized by the investors of such product may be substantially adversely affected by the unfavorable performance of a small number of these investments. Furthermore, an investment product may not have fixed guidelines for industry diversification and investments may be concentrated in only a few industries.
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