Performance figures for each account are calculated using time weighted rate of returns on a daily basis. The Composite returns are calculated based on the asset-weighted monthly composite constituents based on beginning of month asset mix and include the reinvestment of all earnings as of the payment date. Composite returns are as follows:



In June 2012 we formed the NWM Private Equity LP, a private equity pool for our clients that would allow them to participate in this well-performing asset class.

Specifically, NWM’s pool provides more diversification, lower minimum investments, no future draw commitments, and better liquidity than an investment in a single PE fund.  Our PE pool began with $18 million in assets – the fund now has over $90 million in assets under management (AUM).

After three years, we said we would:

  1. Provide liquidity at net asset value (NAV) to investors who have held units for three years, and
  2. Distribute 50% of realized gains and income on a quarterly basis.

Both of these will start to occur now.

Starting this September, the fund will allow redemptions without fee on units held for at least three years, as well as distribute half of realized capital gains and income on our PE and mezzanine debt investments.

The estimated quarterly distribution for Q3 is just over 1% – or 4% annualized – driven by a few large exits by our managers.

Distributions are a function of realizations and income, so the yield is not fixed. While one should expect some variability in quarterly distributions, a 2-3% annual yield, on average, shouldn’t be too far off the mark over the short term.

Over the longer term, we will continue to distribute quarterly, half of our realized gains and income that we hope will be 10-12% per year net. Distributions will get to 5-6% in that case.

As intended, NWM PE LP has developed into a well-diversified pool of private equity funds, mezzanine funds, and direct investments.

The pool provides our clients exposure to an asset class where minimum investments are typically as high as $5-million per fund and commitments are drawn over four to five years, with no or limited liquidity.

The nature of our pool allows for immediate exposure to PE and mezzanine debt that is diversified across managers, vintages, strategies, and regions.

Over the past few years, we’ve watched as major endowments, ultra-high net worth families, and pension-class institutional investors have broadened their asset allocation and increased their positions in private equity and private debt.

We believe our clients have much to gain from private equity as an asset going forward, mitigating portfolio volatility especially in economic environments such as the one we find ourselves in now.

2015-09 NWM Private Equity LP Liquidity and Distributions - JN Signature

John Nicola, CFP, CLU, CHFC
Chairman & CEO
Nicola Wealth Management

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