Five Questions With…Raj Vora, Vice President, Northern Trust Private Equity

1. Prior to joining Northern Trust Global Advisors’s funds-of-funds group, you were an analyst at Goldman Sachs in New York and an associate at Chicago-based buyout firm Wind Point Partners. How will your experiences there inform your new role?

My background in investment banking and on the direct side of the buyout market lends itself well to the diligence and sourcing of investment opportunities for the underlying funds we invest in. In addition, 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.

2. What are the most important qualities you will 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 in absolute terms and relative terms, 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 that it uses this differentiation to outperform other funds in the market.

3. 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.

4. 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 into private equity, so we do not select underlying funds based on timing the market. Instead, our strategy has been to remain focused on small to middle-market opportunities where we believe markets will continue to have inefficiencies. This strategy is in large part based on our team’s value-based approach. With our respective backgrounds as lenders, bankers, operators, and direct investment professionals, we believe that our consistent philosophy should drive returns for our investors in any economic cycle.

5. How will 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.

Edited for clarity.