FW Capital’s investment strategy and process are comprised of four key components: Investment Theme Development, Portfolio Management, Landscape Assessment and Fund Selection.
Investment Theme Development: FW Capital develops investment themes based on our observations of the economy, capital markets and the private equity market. We focus on investment themes that are secular or long-cycle in nature. We target private equity sectors where there is strong evidence of either growth or capital scarcity.
Portfolio Management: We do not use hard allocation targets when constructing portfolios, but rather rely on the judgment of the team to achieve balance across key diversifiers. Key diversifiers include vintage year, strategy, industry and geography. It is important to note that the quality of individual investments trumps any allocation considerations.
Landscape Assessment: FW Capital proactively solicits introductions to funds through our network of relationships, including general partners, other limited partners, lenders, advisors and intermediaries to identify the universe of private equity funds within our targeted sectors. Investment professionals conduct conference calls and meetings with qualified, institutional funds to determine whether or not a fund is a strategic fit based on our established investment themes and other portfolio considerations. Once a firm has been prioritized, team members are assigned to conduct due diligence which includes a detailed review of a fund’s portfolio and track record and multiple references with portfolio company CEOs, LPs and advisors.
Fund Selection: When evaluating a potential commitment to a private equity fund, FW Capital focuses on a manager’s differentiation, investment judgment and alignment of interests. A manager’s differentiation or competitive advantage is typically a function of industry focus, situational expertise, global reach and/or operating capabilities. We believe that industry focused funds are better positioned than generalists to make insightful investment decisions and add value to their portfolio companies. We prioritize firms that have demonstrated investment judgment across market cycles and those with material GP commitments and partnership terms friendly to its limited partners.
- Develop timely investment themes relevant to the current market environment
- Mitigate risk through portfolio management, balancing across key diversifiers
- Proactive and outbound assessment of the investment landscape
- Prioritize managers exhibiting strong differentiation, investment judgment and alignment of interest.