Funds & Strategy

A THOROUGH AND CONSIDERED APPROACH TO INVESTING IN PRIVATE MARKETS

Each year, we access some of the world’s leading private market investment opportunities, across a range of sectors, strategies and investment vintages.

Each fund goes through a rigorous selection process, led by the Titanbay Investment Team, with additional oversight from the Titanbay Investment Advisory Board (IAB). This is further supplemented through our relationship with Mercer, a leading global investment consultant, where we access additional research and ratings.

The outcome is a curated selection of top-tier funds each year from which you can build portfolios for your clients.

Private market investments can be excellent portfolio diversifiers for investors seeking alternative drivers of risk and return. But choosing the right managers, carrying out due diligence and gaining access to top-quartile funds are essential requirements for creating a suitable and effective portfolio.

At Titanbay we know that these are not simple tasks. That's why our Investment Team uses deep knowledge of private markets, combined with extensive networks and industry connections to secure access to some of the best opportunities in the asset class. By using our platform, you can open your clients up to these fund opportunities.

How we select funds

Our holistic approach to fund selection, which includes both top-down and bottom-up considerations, ensures the opportunities on our platform are best in class.

From a top-down perspective, we consider how long-term macroeconomic trends should influence the strategy.

At the same time, we take a bottom-up view to help us find those managers with the best track record, most consistent performance and repeatable strategies.

diversification

Titanbay has a highly selective and disciplined fund selection philosophy; our aim is to create a well-diversified portfolio every year that can cater to different investment requirements.

As an example, 5 top-down characteristics we consider when setting our Strategic Asset Allocation are

Stage of investment
Fund size
Investment style
Geographic focus
Sector specialism

In tandem, we recognise a need among experienced investors for more specialised private market investments. As such we consider and evaluate funds from the following subcategories for inclusion

Opportunistic
Environmental, social & governance (ESG)
Fund of funds
Private credit
Real Estate

Stage of investment

Venture capital, growth, buyout etc demonstrate different risk/reward profiles, with a suitable balance needed.

Fund size

Different funds will target the lower mid-market, mid-market, large and mega spaces. Different fund, and therefore company, sizes demonstrate different risks, opportunities and outcome volatilities.

Investment style

Growth vs value. Growth implying rapidly developing companies with high entry multiples. Value implying slower growing opportunities with more complex situations. These different flavours will perform differently at certain points in the cycle.

Geographic focus

Some funds are global in nature and others target specific regions. Investors should take a holistic approach towards their geographic allocations.

Sector specialism

There are funds that target individual sectors vs others that adopt a more generalist strategy. The Titanbay Strategic Asset Allocation has a leaning towards sectors demonstrating long-term secular tailwinds but the team appropriately diversifies the offering.

Information advantage of private markets

The dispersion of returns between the top-performing private market funds and the remainder of the funds in the asset class is very wide, much more so than in traditional markets.

In part, this is because, unlike their traditional counterparts, private markets are characterised by a lack of public information. In public market investing, the data that guides investment decisions is made available to all participants at the same time, eliminating any competitive advantage arising from the information.

This is not typically the case in private markets.

As a result, managers of private market funds are much less likely to compete away returns than their public market equivalents. This is because they are operating with knowledge – gained by their greater access to and thorough due diligence on target companies – that is not available to their competitors. Their outperformance, if it occurs, is also more likely to persist.

Selecting only the top-performing managers is crucial for producing consistently leading returns, and is where the specialist knowledge that the Titanbay Investment Team possesses is especially powerful.