Australia's massive $4T pension system has structural biases towards internal management and passive investing. This has led to a slower adoption of alternative strategies, creating a less efficient market where specialized managers like Regal Partners can generate significant alpha.

A diversified alternatives manager gains a significant advantage by seeing pricing across public equity, private equity, debt, and royalties simultaneously. This cross-asset visibility allows them to identify the best risk-adjusted return for any given opportunity, choosing to structure a royalty instead of buying equity, for example.

Private credit generates a 200 basis point excess spread over public markets by eliminating intermediaries. This 'farm-to-table' model connects investor capital directly to borrowers, providing customized solutions while capturing value that would otherwise be lost to syndication fees.

Rather than competing in crowded auctions, elite private equity firms pursue a differentiated "executive new build" strategy. They partner with proven operators to build new companies from scratch to address a market need, creating proprietary deals that other firms cannot access.

The central task for capital allocators is to identify investment managers with a proven, durable edge—be it in sourcing, operations, or strategy—that allows them to consistently capture alpha in markets that are otherwise becoming more efficient.

To source proprietary hybrid capital deals, avoid the capital markets teams at PE firms, as their job is to minimize cost of capital. Instead, build relationships directly with individual deal partners in specific industries. This allows you to become a trusted, go-to provider for complex, time-sensitive situations where speed and certainty are valued over price.

Contrary to the industry's focus on capital raising, Apollo identifies the generation of high-quality investment opportunities ('origination') as the primary bottleneck to its growth. This mindset shifts their focus from fundraising to building and acquiring platforms that can source unique deals at scale.

A key differentiator for scaled asset managers is moving beyond reactive deal flow. They leverage firm-wide thematic research to proactively identify companies and pitch them customized financing solutions, effectively manufacturing their own proprietary opportunities.

True alpha in venture capital is found at the extremes. It's either in being a "market maker" at the earliest stages by shaping a raw idea, or by writing massive, late-stage checks where few can compete. The competitive, crowded middle-stages offer less opportunity for outsized returns.