Integrating private equity with traditional portfolios: Manager dispersion favors a diversified approach
Fidelity’s multi-manager approach to private equity, supported by research, offers access to a broader investment universe and significant potential to add value through manager selection
Originally published in January 2025 by Fidelity Investments.
Written by Darby Nielson, Chief Investment Officer, Fidelity Institutional Wealth Adviser (FIWA), Vipul Gautam, Senior Vice President, Alternative Product Development, John Conway, Vice President, Alternative Investment Strategist, and Sumit Sharma, CFA, CAIA, FRM, Quantitative Analyst, Portfolio Engineering
Highlights
- Private equity offers the prospects of enhanced returns relative to public equity and diversification for investors with a longer-term time horizon, moderate liquidity needs, or a specific legacy goal.
- The universe of private companies has continued to expand, offering investors the potential for higher returns and greater diversification by strategies, sectors, size of investments and funds, vintage years, and geographies.
- Higher dispersion among private equity managers showcases that robust manager research can add value; Fidelity’s approach seeks to invest in managers that outperform median returns.
- Fidelity’s private equity team brings over 50 years of combined experience investing in private equity, with established networks and relationships with leading private equity sponsors.
