Five Questions with Ethan Vogelhut, Vice President, Adveq

An interview with Ethan Vogelhut, vice president of Adveq, an asset manager that invests in private equity and real assets on behalf of pension funds, insurance companies, family offices and financial institutions. Adveq has more than $6 billion in AUM.

1. As head of Adveq’s Opportunity program, you oversee all of Adveq’s U.S. buyout and turnaround investments. How do you divide your time between fund of funds and separate accounts? 

It’s really all one time-set. We provide a customized solution into areas of the market that we think are most attractive. These areas are generally the same for our fund-of-funds as well as our managed accounts. In the U.S., my focus is on the lower end of the middle market, as well as turnaround investments.

We think those strategies work through different cycles and are capable of generating highly attractive returns on a risk-adjusted basis. As such, what we like for our fund-of-funds will typically work for our mandates as well. Our LPs hire us for our specialization and our ability to give them exposure to parts of the market that they can’t necessarily access themselves.

2. Any areas of particular interest right now?

We’re really more focused on control investing, where the GPs own the businesses they’re buying and can help those businesses navigate through both good and bad environments. We like … groups that are able to buy well and help fix and build companies. We tend to focus on the lower end of the middle market, where valuations are still reasonable, there’s less leverage involved and you can make more operational changes for small less-professionalized companies.

3. How do you stay in the lower middle market with managers building much larger funds?

There are certain funds that we’ll follow up-market, to an extent. There is a certain point where they may outgrow us. But if we think there’s a very skilled manager and they have some advantage and they’re growing their team — commensurate with the growth in their fund size — and they’re not drifting from what they’re good at, we’ll definitely consider it and stick with a group that’s really differentiated.

But there are times when we do need to replenish our portfolio. We’re always looking for new, promising managers. It could be an emerging manger. It could be a Fund II, or a Fund III or a group that has a bit of a hairy story behind it, where we think there may be a hidden gem there. The market may overlook it, but if you spend enough time on it, you could get comfortable with what on the surface may look like too much of a story for some investors.

4. Being under 40, how did the financial crisis and other market upheavals shape your career?

One of the things that’s important in our business is to be skeptical — not to take things at face value and really validate what it is you’re being told. Being going through two of those cycles in my career, which has been almost 15 years now, has given me a good perspective and a cautious perspective. In our industry, you have to be patient and you have to be looking for enduring trends and certain characteristics of fund managers that will work in different cycles.

5. Bring us up to date on growth in your New York office and are you looking to hire?

Our office in New York has more than 20 people now. The office has grown quite a bit. When I joined in 2010, we were eight or nine people. Lee Gardella, managing director, oversees risk management for Adveq and leads our office in New York. I lead the U.S. buyouts effort out of New York, and Steve Yang leads our early stage venture capital investments. We’re building out the team to continue investing in the U.S. and are indeed looking for one or two talented investment professionals.

Action Item: Contact Adveq at 212-488-5330 or

Edited by Steve Gelsi

Photo of Ethan Vogelhut courtesy of Adveq.