Strategies

Our Strategies Are Designed to Deliver Attractive Risk-Adjusted Returns

Altera’s most valuable asset is our sponsor network. Our team works diligently to build relationships with a diverse set of sponsors across asset classes and geographies. Our sponsors view us as a preferred and diversified source of capital because of our organizational structure and flexible investment mandate – this often can create unique and proprietary opportunities for Altera and our investors.

Our Ecosystem

Our core focus is identifying best-in-class sponsors and finding the most efficient way to gain exposure to their strategies. These exposures primarily present themselves through primary funds, direct investments, and GP stakes. Altera is able to secure hard to access co-investment opportunities by investing in primary funds. By investing in direct opportunities alongside independent sponsors, Altera makes itself well positioned to participate in GP stakes – further aligning with select, emerging managers. As a minority equity partner to various sponsors, Altera is also able to gain allocation to a multitude of strategies sponsored by such managers. We work to structure favorable terms and investment exposures that are only available to large, institutional capital partners.

Primary Funds

We look to partner with best-in-class managers who can consistently identify, invest in, and add value to companies in the lower middle market. Our primary funds program provides investors with a broad suite of asset class exposures.

Our Solutions

Multi-Manager Strategies

Single-Manager Strategies

Direct Investments

Altera’s sponsor relationships give us access to hard-to-secure, direct investment opportunities. Our flexible mandate gives us the ability to consider sponsored investments in all sectors and geographies across the lower middle market.

Our Solutions

Independent Sponsors

Co-Investments

Direct Investments

Altera’s sponsor relationships give us access to hard-to-secure, direct investment opportunities. Our flexible mandate gives us the ability to consider sponsored investments in all sectors and geographies across the lower middle market.

Our Solutions

Independent Sponsors

Co-Investments

GP Stakes

Altera provides capital and strategic support to high-quality, emerging alternative asset management firms who are well-positioned for further growth and development. We look for management teams who want the benefits of a strategic partnership while maintaining their independence.

Our Solutions

Primary Equity

Secondary Equity

Asset Coverage

Our multi-asset class platform provides investors with exposure to asset classes generally unavailable to non-institutional investors – private equity, real assets, and private credit. These stand-alone offerings aim to provide an attractive, risk-adjusted return and a low correlation to public equity and bond markets. We prioritize a tactical, value-oriented approach to investing across these asset classes.

Private Equity

We look to invest in segments of the private markets that, in our view, are underserved by larger pools of capital. We believe backing growing companies in the lower middle market is an all-weather strategy.

Our Solutions

Buyout

Growth Equity

Venture Capital

Real Assets

We believe investors need to diversify their real asset portfolios beyond easy-to-access real estate investments. Our strategies give investors exposure to a multitude of investments backed by real assets such as self storage, extended stay hospitality, solar infrastructure, etc.

Our Solutions

Real Estate

Infrastructure

Private Credit

Investors have been starved of meaningful yields for years. In response, capital has flooded to riskier assets. We look to invest in private credit strategies that utilize conservative capital structures, more stringent covenants, and produce higher yields.

Our Solutions

Senior

Mezzanine

Opportunistic

What We Look For

The dispersion of investment outcomes is meaningfully wider in private markets. This presents both a compelling opportunity for active manager selection. The process through which we evaluate sponsors and opportunities is both quantitative and qualitative. Our diligence framework aims to piece together different data sets and characteristics that we believe correlate with top-quartile managers.

Our target managers encapsulate the following characteristics:

Unquestionable
Integrity
Emphasis on Risk
Management
Clear Competitive
Advantage
Holistic Sponsor
Alignment
Long-Term Value
Creation

Unquestionable Integrity

Our primary focus is partnering with sponsors who share the same core ethics as Altera. We actively look to avoid conducting business with firms who fail to meet our moral and ethical standards, regardless of the opportunity and their investment performance. Ultimately, we believe a lack of integrity will result in poor long-term investment performance.

Emphasis on Risk Management

A tenet of how we allocate our investors’ capital is with capital preservation top of mind. We are not in the business of identifying opportunities that can yield the highest possible return. Rather, we look to identify managers who can consistently execute on their investment strategy, regardless of the macro environment. A rising tide will lift all boats, but true skill is evident when the “good times” pass.

“If we avoid the losers, the winners will take care of themselves.” – Howard Marks

Clear Competitive Advantage

There is a constant, evolving universe of investment managers looking for capital to execute on their strategy – and rarely do those managers lack the intellectual ability required. However, not every manager has a “right to win”. We believe teams that have a clear competitive advantage will be the ones that to deliver consistent risk-adjusted returns. That advantage may present itself through proprietary sourcing, operating capabilities, sector specialization, etc.

 

Holistic Sponsor Alignment

We feel a key to successful private markets investing is to always be aligned with our sponsors. Our focus is on ensuring that the manager is incentivized to maximizing net returns. There are several levers we negotiate with sponsors that impact overall returns; including the sponsor‘s committed capital to their own strategy, management fees, carried interest fees, and overall waterfall structure. Our goal is never to overzealously reduce the underlying fees, but to find a balance that protects our downside while ensuring the sponsor is motivated to achieve the greatest risk-adjusted return.

Long-Term Value Creation

We do not subscribe to the idea that investors can consistently predict changes in interest rates, employment, or overall economic performance. Therefore, we believe investors can only achieve superior performance by taking a long-term view with a focus on improving the operating value of the acquired assets. We prefer managers that rely more on earnings growth to drive returns than incorporating high levels of leverage and projecting multiple expansion or cap rate compression at exit.

Unquestionable
Integrity

Unquestionable Integrity

Our primary focus is partnering with sponsors who share the same core ethics as Altera. We actively look to avoid conducting business with firms who fail to meet our moral and ethical standards, regardless of the opportunity and their investment performance. Ultimately, we believe a lack of integrity will result in poor long-term investment performance.

Emphasis on Risk
Management

Emphasis on Risk Management

A tenet of how we allocate our investors’ capital is with capital preservation top of mind. We are not in the business of identifying opportunities that can yield the highest possible return. Rather, we look to identify managers who can consistently execute on their investment strategy, regardless of the macro environment. A rising tide will lift all boats, but true skill is evident when the “good times” pass.

“If we avoid the losers, the winners will take care of themselves.” – Howard Marks

Clear Competitive
Advantage

Clear Competitive Advantage

There is a constant, evolving universe of investment managers looking for capital to execute on their strategy – and rarely do those managers lack the intellectual ability required. However, not every manager has a “right to win”. We believe teams that have a clear competitive advantage will be the ones that to deliver consistent risk-adjusted returns. That advantage may present itself through proprietary sourcing, operating capabilities, sector specialization, etc.

 
Holistic Sponsor
Alignment

Holistic Sponsor Alignment

We feel a key to successful private markets investing is to always be aligned with our sponsors. Our focus is on ensuring that the manager is incentivized to maximizing net returns. There are several levers we negotiate with sponsors that impact overall returns; including the sponsor‘s committed capital to their own strategy, management fees, carried interest fees, and overall waterfall structure. Our goal is never to overzealously reduce the underlying fees, but to find a balance that protects our downside while ensuring the sponsor is motivated to achieve the greatest risk-adjusted return.

Long-Term Value
Creation

Long-Term Value Creation

We do not subscribe to the idea that investors can consistently predict changes in interest rates, employment, or overall economic performance. Therefore, we believe investors can only achieve superior performance by taking a long-term view with a focus on improving the operating value of the acquired assets. We prefer managers that rely more on earnings growth to drive returns than incorporating high levels of leverage and projecting multiple expansion or cap rate compression at exit.