The California Public Employees’ Retirement System’s Vista portfolio provides a stark example of the struggles LPs with mature portfolios have in managing out legacy funds.
Nearly 50 percent of investors are stuck with commitments to so-called ‘zombie funds’, according to Coller Capital's Winter Barometer.
Concern is increasing about struggling funds that will cling to life for as long as possible to keep collecting fees. LPs must get together to kill them off, writes Christopher Witkowsky.
Jon Moulton’s resignation letter to LPs boldly advises winding down the firm’s non-traditional fund and breaking up the portfolio – a suggestion not lost on rivals and secondary investors.
The secondaries specialist is working with several institutions on preferred annex fund-type structures that help LPs to meet capital calls and make fresh commitments.