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'LP's watchdog'

Finding due diligence niche in the sharing economy

Kamal Suppal wants to make investments in smaller funds possible for groups of investors by providing the due diligence.

Kamal Suppal is betting he can extend the sharing economy of vacation rentals, Airbnb homes and Uber rides to the realm of due diligence for private markets funds. The former senior NEPC LLC research consultant left the firm in April to launch Emerging Markets Alternatives LLC, with the goal of connecting resource-constrained institutional investors with private markets funds in emerging markets too small to be of interest to big consultants.

Mr. Suppal, who has taken on the title of chief investment auditor, said rather than offering investment recommendations, he'll be serving as a bridge between general partners of funds "too niche-y, too small" to be on most investment radar screens and investors potentially interested in making commitments to those funds as limited partners. And that's where "peer sharing" could kick in, Mr. Suppal said.

For investors who find the opportunities that Mr. Suppal identifies as worthy of further due diligence, "no one particular LP has to undertake the burden of that project." Instead, the costs can be shared across the interested parties, he said. So if 10 investors are pointed to a small private markets fund in an emerging or frontier market, and seven are ultimately interested in proceeding to "the next leg of due diligence," the costs of the audit will be split among the seven, leading to "substantial fee savings," Mr. Suppal said. "A lot of good (investment) ideas fall through the cracks," either because they're not scalable enough to be picked up by the regular gatekeepers or because investors don't have the resources to commit to "one-off opportunities."

Mr. Suppal said he's looking to fill that gap as the "LP's watchdog" for opportunities they would otherwise have had little chance of pursuing.