Adveq - Functions

Adveq’s international investment management team, which consists of highly qualified professionals, applies a rigorous and disciplined approach to its investments in top tier funds worldwide. This approach comprises bottom-up manager selection, management of placement capacity with access restricted funds, monitoring of fund investments and carrying out specific research projects.

Manager Selection: Adveq identifies new fund investment opportunities at an early stage. It is a longtime investor in many highly successful fund managers that are among the most established firms in the industry today. Adveq sees several hundred new private equity fund investment opportunities in the US, Europe and Asia every year, all of which are subject to a rigorous due diligence process. Adveq first applies an initial screening process in order to identify the most attractive offerings. These offerings undergo an in-depth due diligence. The due diligence process includes detailed portfolio and team analyses, peer group comparisons, in-depth discussions with the fund manager team, and reference calling, as well as legal and tax-related due diligence. Adveq’s IT infrastructure, including its proprietary database, and external data sources support the entire manager selection process. For the most attractive fund investment opportunities this process results in an investment recommendation.

Management of placement capacity: Many of the funds that Adveq is invested in are not accessible to new investors and have restricted allocations to existing investors. Adveq has gained access to these managers either because it was an early investor in their funds or because they have invited Adveq to participate due to its reputation. The fact that Adveq is highly disciplined in limiting the size of its own fund of funds, by investing only with the best fund managers, has gained it respect in the private equity fund manager community. Another element of its strong reputation is Adveq’s commitment to fiduciary governance, the protection of confidential portfolio company data and its global perspective and market insight relating to venture capital, buyout and other private equity investments.

Monitoring of fund investments: After Adveq subscribes to a target fund, it continually subjects each fund investment to a detailed monitoring process, both at the level of the fund manager and in terms of the underlying fund investments. The monitoring process allows Adveq to continually evaluate the activities of its fund managers which in turn enables it to provide added value to the fund manager, prepare for the due diligence of future funds and provide aggregated portfolio reporting to its own investors. Adveq’s senior investment professionals are members of the advisory boards of several venture capital and private equity funds.

Specific research projects: Adveq’s investment approach is based on the philosophy that in the inefficient private equity markets, superior performance can be generated through superior competence, experience and knowledge. Adveq regularly conducts specific research that helps to increase its position as a thought leader within the private equity investor community. The findings of this research are used to optimize Adveq’s portfolio construction, risk management, fund manager selection and monitoring of fund investments, as well as supporting its efforts to optimize placement capacity with access restricted fund managers. Adveq shares selected elements of its research findings with its own investors, fund managers, and, to a limited extent, with the general public.

Financial management at Adveq is divided into two distinct areas - Adveq’s group companies and Adveq’s investment partnerships - and includes functions such as financial administration and reporting, accounting, controlling, tax, cash management, dealing with regulatory issues and product structuring. These functions are carefully managed through the clear assignment of tasks and responsibilities between the two separate domains of Adveq’s financial management structure.

Adveq takes its commitment to the highest standard of governance beyond traditional realms by including an examination of the way in which the organization conducts itself in respect of its investors. Adveq’s approach aims to ensure that investor expectations regarding risk and return are adequately reflected in the company’s objectives, corporate strategy and resource management. Relations between investors and investment managers, as well as those between the investment manager and the investee, are also carefully accounted for. Comprehensive fiduciary governance, as Adveq sees it, involves the establishment of and adherence to policies, systems and processes in areas of the company where structural or process risks can occur. Adveq’s corporate and fiduciary governance practices are regularly reviewed and adjusted to reflect changes to regulations and in the marketplace, ensuring ongoing trust from our stakeholders.

Risk management encompasses the skills of creating value for investors as well as a firm’s stakeholders by ensuring firstly, that the risks taken neither exceed investors’ nor the firms’ well defined appetite for risk and, secondly, that the associated risks are adequately compensated by performance.

Accordingly, Adveq’s risk management function is constantly fine-tuning strict policies and processes to identify, assess, control and manage the inherent risks associated with fund of funds products, as well as those relating to Adveq as a company or to private equity investing in general.

The pro-active generation of risk management and market related data and know-how, as well as extensive knowledge management, not only lie at the heart of risk control, but are constantly advanced to anticipate and exploit trends within private equity markets. This approach benefits Adveq’s investors, who enjoy an enhanced level of confidence, as well as improved expected returns on a risk-adjusted basis.

In order to enhance risk-adjusted performance, the risk management function actively contributes to all aspects of program and product design, as well as fund manager selection and portfolio construction. Using our long standing knowledge and innovative tools, we are able to proactively identify future performance drivers and integrate them into our product design.

Systematic performance measurement processes ensure that feedback loops continue to inform institutionalized learning and allow the ongoing benchmarking of all existing knowledge, processes and tools against best practice and real experience. Performance measurement plays a key role in the overall investment decision process. Only strict adherence to these principles of best practice guarantees that Adveq is able to stay at the forefront of private equity risk management.

Adveq’s risk management function utilizes its existing know-how and tools to advise clients on their investment decisions, whether they are driven by a bottom-up fund manager selection or by a top-down portfolio construction (asset allocation) approach. In this way Adveq helps its clients to make more successful investment decisions by focusing on maximizing the probability of higher risk-adjusted performance.

Adveq’s business development activities are geared towards serving its global investor base and prospective investors to ensure that they receive the very best individual and professional advice. Adveq is committed to building long-term relationships with its investors, based on high standards of service and mutual trust. Consequently, Adveq continually researches and compares markets to provide institutional investors with know-how about market developments, as well as clients’ intentions towards private equity vehicles.

Adveq supports its investors in building their private equity portfolios and provides comprehensive reporting and regular fund updates. Adveq is able to quickly respond to any questions, demands and concerns investors may have and offers both experienced and new private equity investors expert advice.