Stable teams could become greater differentiator in private markets

RAPID growth in private markets could put pressure on a long-debated due diligence factor – team stability – and may even become a differentiating factor for general partners (GPs) or fund managers.

There is some evidence that turnover in a private equity fund manager’s team is associated with positive performance, but many investors told The Business Times that stability remains an important consideration.

“While I can’t comment on individual (situations), huge departures can be one of the big red flags in due diligence,” said Walter Zhang, director and head of private markets investor relations in Asia at Indosuez Wealth Management.