Limited Partners Feature

Introduction Lawrence Schloss Andrew Kwee and Tycho Sneyers Marco Masotti Stephen Vogt Marc Sacks

More than two years have elapsed since institutional investors in alternative assets got sucked into the downdraft of a global financial crisis and saw their performance plunge and their assets evaporate. Happily, much of the devastation has been repaired, as portfolio companies slowly returned to health, bolstered by an economic recovery and reinvigorated stock markets, and, of course, the return of liquidity that fuels private equity and hedge fund investments.

But in a sense the real work is just beginning. Investors are adapting to a new post-crisis era, reassessing where and why things went wrong, and where to go from here. The lessons learned from the buyout bubble are reshaping just about every facet of investing, from picking allocation targets to valuing assets to choosing which fund managers will be shown the door. It's a changed -- perhaps chastened -- environment where there's less of everything: capital, profits, blind faith and forgiveness. In this environment, both general and limited partners face different challenges, none that will be easily met. In the pages that follow, we talk to some of the bigger, more sophisticated limited partners around about where they've been and where they're going.