Core Insights - The article discusses the rise of "directs" in private equity, a model where investors select individual companies rather than investing in pooled funds, driven by the increasing wealth of family offices [2][6][31] - Matt Swain, CEO of Triago, has been pivotal in transforming the directs sector into a significant business, raising substantial capital and attracting attention from major investment firms [5][12][30] Company Overview - Triago, under Swain's leadership, has become a leader in the directs space, raising $3 billion in equity capital for 35 deals, which supported over $10 billion in purchases [12][30] - Houlihan Lokey, a mid-tier investment bank, acquired Triago and has since leveraged its resources to enhance the directs model, aiming to expand into new areas like continuation vehicles and co-investments [23][24][30] Market Dynamics - The directs market is projected to grow significantly, with estimates suggesting it could reach around $200 billion this year, a substantial increase from previous years [6][30] - Institutional investors, including pension funds, are beginning to show interest in directs, indicating a potential shift in investment strategies towards more direct equity investments [31][32] Investment Strategy - The directs model offers higher potential returns compared to traditional private equity, with investors seeking returns of 3x or more, contrasting with the typical 2x returns from conventional PE funds [13][31] - Directs sponsors typically do not charge fees unless they achieve significant returns, aligning their interests closely with those of their investors [14][19] Competitive Landscape - While the directs model is gaining traction, it still faces challenges in achieving mass adoption among traditional private equity investors, who prefer pooled investments for quicker capital deployment [7][31] - The success of the directs model has attracted competition, which could lead to increased prices and reduced profit margins for existing players [7][30] Future Outlook - Swain envisions a future where directs will revolutionize private equity, making it more liquid and accessible, akin to public markets [31][32] - The increasing interest from large pension funds in directs co-investments indicates a growing acceptance of this model within institutional investment strategies [32]