Portfolio Solutions

What is Private Equity?

Private equity (PE) represents direct investment in companies not listed on a stock exchange. Private equity managers (‘General Partners’ or GP’s) actively map and source attractive investment opportunities before spending several months performing due diligence and preparing value creation plans for target companies. Once a stake is taken, the GP draws on a value creation ‘playbook’ (including operational expertise, strategic repositioning, and financial optimisation) to help the company realise its potential over a 3-7 year holding period. GP’s then work through an orderly exit process which includes a broad range of prospective buyers across strategic, trade, other PE investors and an Initial Public Offering (IPO).

PE as a sub-asset class of private markets spans venture capital (backing startups), growth equity (accelerating expansion-stage companies), buyouts (enhancing established businesses) and turnarounds/special situations (rescuing or repairing bad balance sheets or companies not operating at full potential).

What is Private Real Estate?

Private real estate applies an ‘active ownership’ approach to real estate assets. This includes private real estate fund managers acquiring land or buildings (not traded on a stock exchange) with a plan to improve or renovate the assets and amenities. Private real estate investments stand in contrast to publicly traded REITs (Real Estate Investment Trusts). Private real estate typically includes land and buildings across a number of sectors (including residential, commercial, industrial and land) and investment strategies (core plus, value add and opportunistic).

What is Private Debt?

Private Debt (or private credit) includes any debt held by or extended to privately held companies (“the borrower”). It comes in many forms, but most commonly involves non-bank institutions (“the lender”) making loans to private companies or buying those loans on the secondary market. Private debt fund managers raise and manage funds with a wide spectrum of underlying investment strategies. For example, some private debt funds provide capital to private equity-backed borrowers to fund acquisitions, others fund real estate development projects and some invest entirely in the debt of distressed companies.

What is Private Infrastructure?

Private infrastructure applies an ‘active ownership’ approach to infrastructure assets and involves direct investment in essential physical assets and systems that underpin economic activity. Private infrastructure managers acquire stakes in utilities, transportation networks, digital/fibre networks, energy facilities, communication systems and social infrastructure with a view to leverage operational improvements, regulatory expertise and capital enhancement strategies to optimise assets. The typical hold period is 5-10 years with exits often to other infrastructure investors or strategic buyers.

The private infrastructure asset class spans greenfield development of new projects, brownfield enhancement of existing assets, and core infrastructure providing stable income streams—delivering attractive risk-adjusted returns through essential service provision.

The Spire PMP strategy applies a top-down framework to assess the relative attractiveness of private equity, private debt, private infrastructure and private real estate within parameters approved by the Investment Committee. This process, referred to as the quarterly Relative Value Analysis, draws on a range of inputs including asset class return data, volatility measures, correlations, capital flows, valuation indicators, financial metrics, economic forecasts and external research.

The analysis assists Spire in forming a view on prevailing conditions across private markets sectors and in determining how the Portfolio may be positioned within its existing investment guidelines. This process forms one component of the broader investment approach and does not guarantee improved performance or specific investment outcomes.

*This diagram is for illustrative purposes only

Spire’s thematic approach to sourcing aligns with the firm’s prevailing investment views. The Spire Investment Team proactively searches, sources, researches and structures investments in line with 2 broad categories:

Strategic – capitalising on mega-themes and carefully targeted opportunities for investment (e.g., digital infrastructure, protein consumption)
Tactical – opportunistic investments to take advantage of a temporary market dislocation, mispricing or arbitrage opportunity (e.g., distressed debt and venture capital secondaries)

Spire Capital actively leverages its networks and rigorous screening processes to access enhanced deal flow. The firm’s highly experienced Investment Team pro-actively works with a broad range of sourcing channels including existing General Partners (over AU$2.25bn deployed as at Q4 2025), alumni networks (e.g. Partners Group, QIC, MLC Asset Management), fellow fund/co-investors (e.g. Goldman Sachs), prospective GP’s (over 250 actively monitored) and asset allocators.

Manager Selection

What are Secondaries?

The secondary market refers to transactions in which investors buy and sell existing interests in private market funds. In these transactions, a purchaser acquires an interest that has already been partially or fully invested by the fund, rather than making a new (primary) commitment.

Secondary transactions generally provide greater visibility over the underlying portfolio because the assets are largely known at the time of acquisition. As a result, the level of “blind pool” exposure is typically reduced compared with primary fund commitments, where underlying investments are made over several years.

Primary private market funds often take between three and five years to deploy committed capital, and investors may not receive distributions until later in the fund’s life. Secondary transactions may lead to earlier distributions because the acquired interests are generally in more mature funds. This can reduce the early-stage return profile commonly referred to as the “J-curve”; however, outcomes will vary depending on the nature and performance of the underlying assets, prevailing market conditions and the terms of each transaction.

Secondary interests may provide broader diversification because they can relate to multiple funds or to funds with established portfolios of companies or assets. Diversification benefits are not assured, as they depend on the composition of the acquired interests and their underlying exposures.

Spire PMP features a multi-layer portfolio construction approach which balances core institutional funds with opportunistic investments and liquidity reserves. This design ‘seeks to deliver’ sustainable 10-13% target returns while aiming to provide monthly redemptions (subject to liquidity constraints, the underlying fund and the constitution).