Key Elements of Pathway’s Investment Process
Pathway’s extensive and rigorous investment process—which aims at selecting high-quality investment funds in order to generate strong, risk-adjusted returns over the long term—is applied to all investment opportunities under review. Key elements of Pathway’s investment process include the following:
Ensuring that the firm is aware of and has the opportunity to review what it perceives to be high-quality investment opportunities available is one of the most important elements of Pathway’s investment process. These opportunities come from Pathway’s extensive existing relationships and, equally as important, from its substantial research and proactive development of new relationships around the globe.
Dedication to Due Diligence
Through its careful and thorough due diligence process, Pathway aims to identify new, high-quality investment opportunities and to avoid costly mistakes. The Pathway team has reviewed over 11,000 private market offerings worldwide, covering a wide variety of investment strategies, including all stages of venture capital; all types of buyouts and growth capital investments; numerous forms of distressed, turnaround, and restructuring strategies; and several debt-related strategies. Pathway’s process has been developed and refined over more than 25 years through a number of market cycles that included significant political and economic events. Pathway’s thorough approach is time-tested, proven, and consistent.
Adherence to Selection Criteria to Avoid Excess Risk
The private markets provide investors with the potential for high returns. There are also risks associated with investing in the private markets. Pathway seeks to avoid the risks that are not necessarily compensated for by higher returns. In order to minimize risk, Pathway employs proven investment principles rather than unsubstantiated investment fads. The firm developed its investment criteria more than two decades ago keeping these principles in mind, and these principles are still the driving force behind the firm’s investment decisions today. Pathway has successfully committed over $70 billion in more than 550 private market investments using these criteria.
Effective Negotiation to Improve Economics and Limit Downside
Detailed and effective negotiation of limited partnership agreements is critical because of the long-term nature of private market partnerships. Pathway’s negotiating teams are highly effective at identifying issues and ensuring that these issues are properly addressed, with the overall goal of reducing the downside risk of an investment. Pathway’s senior professionals have participated in the negotiation of over 400 partnership agreements.