LP Profile: Saranac Partners

Established in 2016, Saranac Partners is a multi-family office and financial advisory firm with a client base of global private investors, typically with an interest in the UK and Europe.

"We want to help our clients access private equity markets in the most efficient way," says head of private capital Robert Crowter-Jones. "However, getting the underlying data, getting access to markets, funds and companies, is challenging for investors. Thus, we work very closely with our families to create a tailor-made investment programme for them."

Saranac invests on behalf of its clients in private equity by taking LP positions and buying GP fund stakes. Saranac tends to invest £2-10m with each manager, predominantly in primaries, but also on the secondaries side. "On the buy side, we try to find managers that can buy complexity," says Crowter-Jones. "For example, those that can buy secondaries that are difficult and harder to understand." It is an attractive time to be a seller in the secondaries market, he adds, since auction prices are very high.

The organisation sees complexity based on either the underlying investment portfolio, including concentration, less liquidity, bigger dispersions of value, or because of external factors around the manager or LP.

As well as being an enthusiastic secondaries player, Saranac is also keen on co-investments. "We also help our clients gain exposure to private equity co-investments coming from the funds, as well as direct investments coming from our other clients because of the connections with those companies," says Crowter-Jones. Saranac has done eight co-investments and direct investments in the last two years.

Saranac does not tend to invest in pure first-time funds. Nevertheless, it will look at spinouts from larger vehicles or from teams transitioning from investing with a balance sheet to a fund structure.

Building synergies
As the organisation works with several family offices, it is interested in creating opportunities between them and promoting joint ventures. "Many of the companies we work with in our investment portfolios take real value from family offices and from our clients, adding industry knowledge, network, and the ability to generate new opportunities," says Crowter-Jones.

The organisation's largest customers are based in the UK, and understandably Brexit is a theme often discussed by Saranac and its clients. Crowter-Jones says there are still very exciting opportunities in the UK, especially for the domestic investors that are not concerned about currency fluctuation. He adds that some investors are also considering investing in the UK from offshore locations due to currency weakness.

"There is a lot of dry powder at the moment, which will continue to put pressure on increasing prices, but deals may get pushed until after 31 October," says Crowter-Jones. He also thinks that the biggest bumps in the road will be driven by central banks and the changes in interest rates.

The firm is looking to take advantage of the technology in the financial services market, by delivering its findings either in aggregated reports, or from the way Saranac communicates with its clients. "I think it is the combination of traditional banking values combined with technology that creates extra value for our clients," says Crowter-Jones.

Family offices have been particularly sensitive to embracing environmental, social and governance (ESG) criteria. Some of the themes that family offices look to are pollution, gender pay, and ethical treatment behaviour. "Families are often concerned about the legacy or impact that they will have in the future; naturally they are thinking about future generations, and inheriting the managing of the portfolio," says Crowter-Jones.

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