Gatekeepers turned poachers?

Recent performance difficulties notwithstanding, private equity as an asset class has been remarkably successful over the past ten years, securing a permanent position as an important component of a growing number of asset allocation strategies worldwide.

It owes its success to several groups of professionals, starting first and foremost with the private equity fund managers themselves. Their advisors – the bankers, accountants and the lawyers – should also be given credit too. But perhaps more importantly still, there are the people on (and alongside) the buyside who deserve praise: private equity and venture capital enthusiasts who went out on a limb for the asset class insisting their institutions put money into unquoted investments, often against marked internal resistance.

Many of these pioneers used external advisors to help them clear those hurdles. These gatekeepers and investment consultants have made a huge contribution to private equity, introducing new types of investors to the asset class and opening up new sources of capital to general partners.

It is a role they continue to play to this day, although often in different ways. The traditional gatekeeper's role has changed: they have long added lucrative fund management activities to their advisory businesses, often because their clients asked them to. Today, while well established and successful, this hybrid business model is not without its critics though, with some asking whether investment advisors running their own funds are in fact not compromised. Well, are they? We went and asked the market. The answer is in the cover story on page 26.

This issue is also accompanied by our first issue of Private Equity Law: this is a chance for us to have some key minds focus on some of the major legal themes relevant to private equity practitioners and investors. The first one looks at buyouts across Europe and will be followed by others looking at fund structures and corporate restructuring. I hope you find it useful.

Finally, you may also notice that we have redesigned the news pages of the magazine: as we continue to grow we want to take our coverage to the next level and this new layout reflects this. Europe remains our core focus but we also want to extend our coverage to private equity as it exists and evolves in other parts of the world.

Philip Borel