Asset managers such as Man Group PLC and AQR are exploring strategies to replicate private equity returns at a relatively lower cost to investors, the Financial Times reported.
The companies are also looking to develop strategies that will allow investors to exit the investments more easily compared to the private equity sector, according to the report.
People familiar with the matter told the FT that London-headquartered Man Group, which manages about $113 billion in client assets, launched a liquid private equity fund in its Numeric division in April. Rather than investing in private equity, the fund will invest in publicly listed small- and mid-cap U.S. companies with return profiles similar to those found in a private equity portfolio.
Meanwhile, Greenwich, Conn.-based AQR Capital Management LLC is reportedly in the early stages of exploring whether it can extend its systematic and quantitative approach to investing to the private equity sector. AQR is also weighing a foray into the secondary market where institutional investors buy and sell stakes in existing buyout funds, the newspaper reported.