5 questions with Raj Vora

Earlier this month, Northern Trust announced that Raj Vora has joined the private equity team at Northern Trust Global Advisors (NTGA), the firm’s multi-manager arm. Vora will focus on portfolio management, sourcing and due diligence of new investments, and investor relations for the growing fund of funds group.

Previously, Vora was an associate at Chicago-based buyout firm Wind Point Partners and, before that, was an analyst at Goldman Sachs in New York. Joshua Payne, senior editor of Buyouts (an affiliated publication of PE Week) checked in with Vora to see how he was settling in at his new job.

Q: How will your experience as an investment banker and working on the direct side of the buyout market affect your new role?

My experience lends itself well to the diligence and sourcing of investment opportunities for the underlying funds we invest in. Given our strategy is focused on small and middle-market funds, it certainly helps to have executed similar transactions as many of the fund managers we work with.

Q: What qualities will you look for in a general partner?

Our team follows a disciplined process when evaluating general partners. As expected, we tend to be most focused on a fund’s track record, its management team’s experience and expected ability to add value to portfolio companies and the fund’s investment philosophy and strategic fit within our overall portfolio.

The most important quality, however, is that a general partner is unique and uses that differentiation to outperform other funds in the market.

Q: What kinds of investments are limited partners wary about these days?

In today’s buyout world, the primary concern in many transactions is financing risk. Limited partners are wary about investing in underlying funds that have a tendency to rely on high amounts of leverage to finance their deals.

Q: What types of funds do you like for the current climate. Turnaround specialists? Distressed debt? Mezzanine?

We believe in taking a long-term approach when investing in private equity, so we do not select underlying funds based on timing the market. Instead, our strategy is to remain focused on small to middle-market opportunities where we believe markets will continue to have inefficiencies. We believe that our consistent philosophy should drive returns for our investors in any economic cycle.

Q: How does the credit crunch affect your investment decisions?

Because we are focused on funds that rely on operational expertise rather than financial engineering, we do not believe the credit crunch will have a significant impact on our investment decisions. I think that increased debt costs and reduced leverage may even lead to lowered entry multiples for many of our underlying funds. The resulting dynamic should help limit the downside risk associated with some of our recent investments.