Chapter 7
Gatekeepersa
7.1 INTRODUCTION
Gatekeepers are professional advisors operating in the private equity market on behalf of their clients. They exist because most institutional investors do not have sufficient exposure to the private equity asset class to justify building and/or retaining the in-house expertise. Gatekeepers first emerged in the 1970s in the United States, when they developed close relationships particularly with public pension plans that were operating under strict rules which often made the use of investment consultants obligatory (see Borel, 2002). They focus on helping clients develop allocation strategies across asset classes, private equity portfolio construction, fund due diligence, and fund selection. Institutional investors such as insurance companies, pension funds, banks, family offices, endowments, foundations, and high-net-worth individuals often even use several gatekeepers in parallel.
The so-called fund of funds is probably the most common type of vehicle in this context and will therefore be covered in more detail in this chapter.1 A fund of funds pools a group of investors and uses the capital to assemble a diversified portfolio of private equity funds. There are many degrees of engagement by advisors. What is common though is that their role is solely as intermediary where the ultimate fund commitment, directly or indirectly, is by their clients. Gatekeepers help their clients to assemble portfolios of funds. Thus, institutional investors, ...
