Kensington portfolios follow a hybrid strategy investing both in private equity funds and directly into private companies. This approach provides a strong foundation of diversification for risk management with a platform for generating strong returns:
Fund Investments provide diversification and steady long-term returns. In addition to strong financial performance, we work to develop strong business relationships with each fund manager to add value to their portfolios and generate secondary and co-investment opportunities. Kensington invests in primary and secondary fund positions. A typical Kensington portfolio may hold positions in 10 different underlying funds, representing investments in 75 to 100 different companies.
Direct Investments in specific companies are designed to create the excess returns in our portfolios. Our direct investments are frequently structured as co-investments led by the managers of our portfolio funds. We also select direct investment opportunities outside of our fund portfolios where we can participate as a member of a strong investor syndicate, and take an active role on the Boards of these companies. By actively building our relationships, we generate strong deal flow to select the best direct investments. A typical Kensington portfolio may hold positions in 10 different direct investments, with a combination of active management relationships and more passive co-investments.