Keep pulling the thread on Michael Kelly.
Michael Kelly believed the next major trend in asset management would be the "democratization of alternatives," making them available to the mass affluent and individual investor markets.
Future Standard merged with Portfolio Advisors, a 30-year-old private equity solutions firm, approximately two years ago.
Future Standard recently announced the acquisition of Post Road Group to establish a fifth vertical in digital infrastructure.
Michael Kelly believes the era of using financial engineering to generate high returns in private equity is over.
Franklin Square grew from a single strategy with $12 billion in assets to the rebranded Future Standard, which now manages $90 billion across five verticals.
Michael Kelly states that private equity evergreen funds are likely to generate net returns of 12-13%, lower than the high-teens IRR or more expected from traditional drawdown funds, due to liquidity management requirements.
Michael Kelly believes the era of generating private equity returns through financial engineering is over for large and mega-cap LBOs due to higher financing costs and high entry multiples of 17x to low 20x EBITDA.
Michael Kelly predicts that middle-market private equity funds will not only continue to outperform their large and mega-cap peers but that the margin of outperformance will increase.
Michael Kelly predicts that 401(k) plans and target-date funds will increasingly incorporate alternative investments, which could comprise 10-15% of these pools.
Michael Kelly predicts that the private wealth channel will be the fastest-growing source of capital for the alternative investment industry for the foreseeable future.
Franklin Square and GSO (now Blackstone Credit) launched the first-ever non-traded Business Development Company (BDC).
Future Standard employs approximately 600 people, with 140 dedicated to distribution and client relationships.