Key Takeaways
- • DSC Quantitative Group, a Chicago-based, research-focused alternative investment firm, announced a new platform of planned investment products designed to track certain Cambridge Associates (CA) benchmarks, according to a Business Wire release dated June 28, 2023.
- • The first product, the DSC CA Global Private Equity & Venture Capital Strategy, is intended to track global buyout, growth equity, and venture capital returns in liquid form.
- • DSC positions the strategy as a way to gain broad private equity-like exposure with lower overall fees than traditional private equity, while mitigating single-manager and vintage risk.
- • The strategy incorporates a systematic volatility control model that DSC says seeks to minimize downside risk while allowing for enhanced returns.
- • Cambridge Associates' Global Head of Private Investments, Andrea Auerbach, said DSC's approach may address needs such as holding capital committed to private funds but not yet called, and providing private equity exposure to the wealth market.
Summary
DSC Quantitative Group ("DSC") announced a new platform of planned investment products that seek to deliver returns tracking certain Cambridge Associates ("CA") benchmarks, according to a Business Wire release. The first product, the "DSC CA Global Private Equity & Venture Capital Strategy," is designed to track global buyout, growth equity, and venture capital returns in a liquid format.
According to the release, the strategy draws on DSC's decade of experience replicating illiquid assets with liquid securities. DSC argues the product gives investors access to broad private equity-like exposure, can be used to mitigate single-manager and vintage risk, and carries lower overall fees than traditional private equity investments. The strategy also applies a systematic volatility control model, which DSC says seeks to minimize downside risk while still allowing for enhanced returns. The firm adds that the product is intended to offer investors flexibility, liquidity, and the ability to customize allocations as needed.
DSC Chief Executive Officer Arthur Bushonville said there is strong investor demand for private equity strategies that combine diversification, "beta-plus" returns, and liquidity. He characterized DSC as a leader in private equity replication products and CA as a leader in private investing, noting that DSC's incorporation of CA's aggregated, industry-level benchmark data into its portfolio construction process enables the unique product platform.
Andrea Auerbach, Global Head of Private Investments at Cambridge Associates, said investors increasingly seek flexible, liquid portfolio management solutions that complement direct private fund investments. She cited two examples: a holding place for capital committed to private funds but not yet called, and private equity exposure for the wealth market. Auerbach said CA believes DSC's approach may offer a solution to some of these challenges.
The release describes DSC as a firm that integrates capital markets experience with academic research and says it has collaborated with financial data providers to develop benchmarks tracking the gross performance of private markets. No fund size, launch timing, or pricing details were disclosed in the announcement.
According to the release, the strategy draws on DSC's decade of experience replicating illiquid assets with liquid securities. DSC argues the product gives investors access to broad private equity-like exposure, can be used to mitigate single-manager and vintage risk, and carries lower overall fees than traditional private equity investments. The strategy also applies a systematic volatility control model, which DSC says seeks to minimize downside risk while still allowing for enhanced returns. The firm adds that the product is intended to offer investors flexibility, liquidity, and the ability to customize allocations as needed.
DSC Chief Executive Officer Arthur Bushonville said there is strong investor demand for private equity strategies that combine diversification, "beta-plus" returns, and liquidity. He characterized DSC as a leader in private equity replication products and CA as a leader in private investing, noting that DSC's incorporation of CA's aggregated, industry-level benchmark data into its portfolio construction process enables the unique product platform.
Andrea Auerbach, Global Head of Private Investments at Cambridge Associates, said investors increasingly seek flexible, liquid portfolio management solutions that complement direct private fund investments. She cited two examples: a holding place for capital committed to private funds but not yet called, and private equity exposure for the wealth market. Auerbach said CA believes DSC's approach may offer a solution to some of these challenges.
The release describes DSC as a firm that integrates capital markets experience with academic research and says it has collaborated with financial data providers to develop benchmarks tracking the gross performance of private markets. No fund size, launch timing, or pricing details were disclosed in the announcement.
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