In a recent ION Influencers Fireside Chat hosted by Giovanni Amodeo, Anders Dalhoff, founder of Advantage Investment Partners, shared his insights on transforming institutional investing through club deals—a collaborative investment model that brings together pension funds and institutional investors to unlock better access, pricing, and efficiency in alternative investments.

Anders Dalhoff’s Journey

• Professional Roots: 13 years in legal and management consulting, advising Nordic private equity firms.
• LP Experience: 6 years with Nordic pension funds.
• Founding Advantage IP: Identified a market gap to reduce costs and enhance returns for institutional investors through collaborative investment structures.

Key Themes & Takeaways

1. The Power of Club Deals

• Objective: Create a platform where institutions can aggregate capital, reduce costs, and improve net returns.
• Mechanism: Investors pool commitments into a single vehicle, gaining better terms and greater influence with fund managers.

2. Access & Exclusivity

• While many pension funds already have strong access, collaboration enhances negotiating power.
• Club deals offer a sense of exclusivity and scale, often positioning participants as one of the largest investors in a fund.

3. Market Trends & Opportunities

• Polarization in the market: Larger funds are growing, while niche funds specialize.
• Advantage IP provides a middle path, enabling institutions to participate in large-scale deals.
• Particularly effective in infrastructure and credit, with growing relevance in private equity buyouts.

4. Workflow in Practice

• Identify opportunities through ongoing dialogue with institutional partners.
• Conduct individual due diligence.
• Aggregate capital into a structured vehicle.
• Negotiate collectively with fund managers.
• Participating institutions maintain direct relationships with GPs post-commitment.

5. Fee & Cost Efficiency

• Club deals can lead to millions in savings:
  • Example: A $100M commitment + $50M co-investment could save $7–8M over the fund’s life.
  • Savings stem from reduced management fees and co-investment fee waivers.

6. Tax Structuring

• Focus on avoiding double taxation, not tax avoidance.
• Structures are tailored to meet the diverse tax needs of participating institutions.

7. Differentiation & Network Effect

• Advantage IP’s strength lies in its network of ~30 institutional investors.
• This network attracts top-tier GPs and creates a virtuous cycle of access and opportunity.

8. Role of Banks

• Banks are leveraging club deals to offer cost-effective access to alternatives for smaller clients.
• The model helps banks maintain competitive pricing while expanding product offerings.

9. Investor Feedback

• Pros: Improved net returns, access to exclusive deals, and cost savings.
• Challenges: Initial complexity and learning curve, especially for first-time participants.

10. Current Market Appetite

• Despite market cyclicality, appetite for private assets remains strong, especially among Nordic pension funds.
• Investors are becoming more selective, focusing on fewer, high-quality GP relationships.

 
Key timestamps:
00:07 Introduction
01:09 Identifying Market Gaps
02:02 Importance of Access in Investments
03:14 Trends in Asset Management
04:55 Creating a Sense of Exclusivity
06:26 Workflow of Identifying Opportunities
09:26 Fee Structures and Savings
12:53 Tax Considerations in Investment Vehicles
14:31 Skills and Differentiation in Investment
16:03 Asset Classes for Club Deals
17:31 Role of Banks in Investment Ecosystem
20:41 Feedback and Continuous Improvement
22:24 Current Appetite for Private Assets
23:48 Conclusion and Acknowledgments