Last updated: 01:48 / Thursday, 10 February 2022
Private equity

GAM Partners with Liberty Street Advisors in the United States to Invest in Late-Stage Innovation Companies

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  • GAM plans to launch a capability which will leverage the expertise of Liberty Street’s private markets investment team
  • Growth equity is a segment of the private equity asset class which sits between venture capital and traditional private equity and "is expanding at unprecedented levels
  • Clients will have the opportunity to gain exposure to a market which has historically been difficult for them to access

GAM Investments has entered into a strategic partnership with the Liberty Street Advisors team specialized in investing in late stage companies in the United States. Its aim is to provide its clients access to these firms through private equity investments.

In a press release, the asset manager has revealed that they will invest in "leading late-stage privately-owned technology and innovation" companies with high growth potential. The team at Liberty Street is deeply experienced in private markets investing and has an extensive track record investing in this sector.

In partnership with Liberty Street, GAM plans to launch a capability which will leverage the expertise of Liberty Street’s private markets investment team. This capability will give clients the opportunity to gain exposure to a market which has historically been difficult for them to access.

 

The firm has highlighted that growth equity is a segment of the private equity asset class which sits between venture capital and traditional private equity and "is expanding at unprecedented levels, with disruptive technology-driven growth across multiple sectors and industries". This growth has led to a proliferation of unicorns, with more than 900 venture capital backed companies currently valued at over USD 1 billion and many more on a similar trajectory.

In this sense, by investing in these types of late stage high-growth, innovation companies the Liberty Street team seeks to participate in their potential appreciation while they are under private ownership.

“We are delighted to partner with Liberty Street to provide our clients with access to leading privately-owned companies. The team at Liberty Street has deep, multi-decade investing experience, as well as established relationships within the venture eco-system, and is an ideal partner for us", said Peter Sanderson, Group Chief Executive Officer at GAM Investments.

He also pointed out that an increasing number of their clients are seeking to diversify their portfolios by including longer-term private asset investment strategies. "In our view, privately-owned companies in their later-stage nonpublic funding rounds could offer investors strong long-term performance potential, while their historical downside resilience and lower volatility compared to public equities also make this asset class attractive for portfolio diversification", he added.

Meanwhile, Kevin Moss, Managing Director at Liberty Street, commented that they are seeing companies stay private for longer, driven primarily by regulatory changes, ease of business model development in the private sphere and a larger pool of available private capital. "A significant portion of these companies’ value appreciation occurs prior to entry into the public markets, at mid or large cap size. We believe that late-stage, private growth companies can present an attractive balance of risk and return for investors, compared to early-stage venture investments and public equities", he concluded.

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