We use high-quality asset class building blocks to construct each client portfolio. Our unique structure aligns interests and minimizes time-to-market.
Makena’s Private Equity portfolio consists of three investment strategies: Buyout, Venture Capital, and Private Alternatives. The Private Equity portfolio is a key component of a broader multi-asset class portfolio. It seeks to deliver an illiquidity return premium over public equities by partnering with proven managers, who have a persistent ability to source attractive investment opportunities across the globe and help create value at their portfolio companies. The Buyout strategy targets mid-cap and small-cap managers with select large-cap exposures; it is balanced across tenured firms and talented newer firms. The Venture Capital strategy leverages Makena’s Silicon Valley network to access seed and early-stage technology managers with complementary exposure to select growth equity and life sciences managers, primarily in the U.S. and China. The Private Alternatives strategy includes opportunistic credit and other idiosyncratic investments with illiquid structures. This allocation allows the flexibility to pursue opportunities not conforming to a traditional private equity portfolio.
Makena’s Real Assets portfolio invests in high-quality Real Estate and Natural Resources opportunities, which can generate attractive returns while providing some inflation protection for a broader multi-asset class portfolio. The Real Estate allocation targets investments which benefit from localized market dynamics characterized by demographic and needs-based demand. We access these investments by partnering with proven managers and operators in bespoke structures that place Makena closer to the asset for better-aligned economics and oversight, while complementing these private investments with a custom high-quality portfolio of public real estate investments. Makena pursues Natural Resources investments on an opportunistic basis, with an emphasis on capturing inflation-hedging characteristics.
Makena’s Public Equity portfolio invests with long-only managers in developed and emerging markets, who provide exposure to high-quality public companies that can benefit from long-term economic growth. Since many public equity markets are efficient, Makena targets areas of inefficiency where we believe our long time horizon and the managers’ persistent skill provide a competitive advantage. We seek to partner with friendly activist managers who have a proven track record of investing in a concentrated portfolio of high-quality businesses run by high-quality management teams, and we emphasize managers with unique regional and sector skillsets. Our managers are a combination of tenured, capacity-constrained firms that are balanced by talented, newer firms. Our public equity strategy is highly differentiated from the myriad of passive options.
Makena’s Hedge Fund portfolio includes Long/Short Equity and opportunistic hedge funds, serving as a risk-mitigating component of a broader multi-asset class portfolio. Long/Short Equity allocates to managers with a proven track record of generating alpha on both the long and short side. Because the ability to generate durable alpha, particularly on the short side, is a rare skillset, we believe our manager selection expertise is a competitive advantage relative to long/short benchmarks and can deliver manager selection alpha for our investors. Our opportunistic hedge funds include a handful of credit and absolute return funds with attractive risk-adjusted return profiles. Most of the Hedge Fund portfolio is allocated to Long/Short funds. The Hedge Fund portfolio attempts to diversify a broader, equity-oriented multi-asset class portfolio over full market cycles, and has a market risk that is approximately half that of public equities.