Key Takeaways
- • Wolfe Research Advisors LLC announced on Thursday the launch of Wolfe Alternative Asset Management (WAM), offering institutional clients access to private market deals across venture capital, private equity and private funds.
- • Under the model, Wolfe will co-invest alongside its clients in private market deals, giving qualified investors access that the firm says has largely been concentrated among the largest institutions.
- • Wolfe cites the private markets ecosystem at $22 trillion in assets under management, more than tripling from an estimated $5 trillion to $7 trillion in 2015.
- • The firm plans to enter the secondaries market later, facilitating liquidity for buyers and sellers of venture capital, private equity and private fund interests.
- • David O'Malley, who joined the firm as head of Wolfe Alternative Asset Management last year, will continue to lead the new unit.
Summary
Equity research firm Wolfe Research Advisors LLC announced on Thursday the launch of Wolfe Alternative Asset Management (WAM), a unit designed to give institutional clients access to private market deals and insights. According to the announcement, the platform will allow clients to search for opportunities across venture capital, private equity and private funds, with Wolfe co-investing alongside them.
In the announcement, Wolfe Research pointed to the rapid growth of the private markets ecosystem, which it put at $22 trillion in assets under management, more than tripling from between $5 trillion and $7 trillion in 2015. The firm linked this growth to a trend of private companies staying private for longer while creating much of their value before going public. Wolfe argues that this leaves public-market investors with less exposure to post-IPO value creation.
Ed Wolfe, the company's CEO, wrote that public markets are increasingly indexed, correlated and dominated by a handful of mega-cap names, making alpha generation harder to achieve. He added that top-tier private deals have often been concentrated among the largest institutions, leaving most qualified investors outside. "WAM hopes to change those dynamics for our members," he wrote.
Wolfe also plans to enter the secondaries market, which would facilitate liquidity for both buyers and sellers of positions in venture capital, private equity and private fund interests. Ed Wolfe argued that the line between public and private markets is blurring, as companies stay private longer and investors operate on both sides, and that the firm's analysts, with fundamental knowledge across public and private players, are positioned to help investors navigate this shift.
David O'Malley, who joined the firm as head of Wolfe Alternative Asset Management last year, will continue to lead the new unit.
In the announcement, Wolfe Research pointed to the rapid growth of the private markets ecosystem, which it put at $22 trillion in assets under management, more than tripling from between $5 trillion and $7 trillion in 2015. The firm linked this growth to a trend of private companies staying private for longer while creating much of their value before going public. Wolfe argues that this leaves public-market investors with less exposure to post-IPO value creation.
Ed Wolfe, the company's CEO, wrote that public markets are increasingly indexed, correlated and dominated by a handful of mega-cap names, making alpha generation harder to achieve. He added that top-tier private deals have often been concentrated among the largest institutions, leaving most qualified investors outside. "WAM hopes to change those dynamics for our members," he wrote.
Wolfe also plans to enter the secondaries market, which would facilitate liquidity for both buyers and sellers of positions in venture capital, private equity and private fund interests. Ed Wolfe argued that the line between public and private markets is blurring, as companies stay private longer and investors operate on both sides, and that the firm's analysts, with fundamental knowledge across public and private players, are positioned to help investors navigate this shift.
David O'Malley, who joined the firm as head of Wolfe Alternative Asset Management last year, will continue to lead the new unit.
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