Your Experts for the European Market

🚀 Exciting Insights from the 11th edition of PE Insights Conference 2024 in Zurich! 🇨🇭

Last week, our Managing Partner @[Stefan Brägger](urn:li:person:tz4DJW2pSM) moderated a panel discussion with Swiss investors Maddalena Orlandini, @[Alexander Hesseling](urn:li:person:xpXtWd1C1e), @[Thomas Gnaegi](urn:li:person:UBarr1fI8i) and @[Cyril Demaria](urn:li:person:639bkeYPlU).

Here are the key takeaways:

1️. 𝗢𝘂𝘁𝗹𝗼𝗼𝗸 𝗳𝗼𝗿 𝗣𝗘 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 𝗽𝗼𝘀𝗶𝘁𝗶𝘃𝗲: The majority of the panelists, supported by a quick survey of the audience, are convinced that the 2024-25 vintages will be good years for private equity. It’s clear that professionals in our industry tend to be optimistic, seeing the glass half full \(when did you last hear from a PE manager that this vintage will be worse than the last?\)

2️. 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 𝗿𝗲𝗺𝗮𝗶𝗻: Despite the positive outlook, fundraising remains difficult. Asset managers are slowly realizing that the days of ever-growing fund sizes and reaching the hard-cap easily won’t come back so quickly, if ever. GPs must now fight for LPs’ attention, focus on returning capital to investors and stand out in a very crowded and competitive fundraising market. However, there are opportunities with new investors who are building portfolios entering the PE asset class, particularly in Switzerland and Germany.

3️. 𝗦𝗰𝗮𝗿𝗰𝗶𝘁𝘆 𝗼𝗳 𝗲𝘅𝗶𝘁𝘀: Light at the end of the tunnel?: Liquidity from PE portfolios is not expected to improve significantly over the next 12 months. However, some improvements have been made as GPs are becoming more innovative with continuation vehicles and dividend recaps.

4. 𝗟𝗣𝘀 𝗿𝗲𝗺𝗮𝗶𝗻 𝗶𝗻 𝗮 𝗯𝗲𝘁𝘁𝗲𝗿 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝘃𝘀 𝗚𝗣𝘀: The pendulum has swung in favor of LPs and this situation is expected to continue over the coming years. While access to top-tier managers was difficult in 2020-21, the current situation has made it easier for LPs to access top managers, get access to co-investments and negotiate more favorable terms, and several panelists were surprised of how much more attention they got over the last few years. Despite this shift, the 2/20 model remains largely unchallenged.

5. 𝗠𝗶𝗻𝗼𝗿𝗶𝘁𝘆 𝘀𝘁𝗮𝗸𝗲 𝘀𝗮𝗹𝗲𝘀 𝘄𝗶𝗹𝗹 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗲: The trend of selling minority stakes to outside investors, either to strategic investors or newly formed pools of capital, is expected to continue. Most of our panelists expect GPs will continue using these exit windows as a tool to manage transition, finance commitments, or investments into new strategies, and they seemed relatively relaxed, as long as the interests with them as investors are aligned.

Feel free to connect directly with Stefan Brägger to discuss these insights further! 🤝

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📝 𝗣𝗢𝗟𝗔𝗥𝗜𝗦 and Axiom Asia Private Capital are excited to have contributed to the latest Absolut\|private edition by Absolute Research: Our article, "Asiatisches Private Equity im institutionellen Portfolio," delves into the exciting investment opportunities presented by the robust growth of Asian economies.📈

Authored by Alex Sao Wei Lee, Debbi Sutuntivorakoon, and Ernest Ong from Axiom Asia, alongside our very own Rolf Dreiseidler from POLARIS, this paper offers valuable insights into the current geopolitical and macroeconomic landscape of the region. We explore the significance of Asia for institutional investors and present strategies to capitalize on the region's growth potential. 🇩🇪 While the article is in German, we highly recommend downloading the e-paper from the Absolute Research website to access this insightful content:👉 https://lnkd.in/eCN\_MZcN

𝗔 𝗳𝗲𝘄 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗮𝗿𝘁𝗶𝗰𝗹𝗲:

1️📈 𝗔𝘀𝗶𝗮'𝘀 𝗚𝗿𝗼𝘄𝘁𝗵 𝗠𝗮𝗿𝗸𝗲𝘁: Asia, home to 60% of the world's population and projected to hold 65% of the global middle class by 2030, is a dynamic growth market with GDP growth forecasts for countries like India, Indonesia, and China significantly higher than those of the Western world.

2️🌏 𝗨𝗦-𝗖𝗵𝗶𝗻𝗮 𝗚𝗲𝗼𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗧𝗲𝗻𝘀𝗶𝗼𝗻𝘀: The geopolitical tension between the US and China, especially regarding Taiwan, remains a challenge. However, the strong economic interdependence between China and Taiwan mitigates potential conflicts and supports the current status quo.

3️💼 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗘𝗾𝘂𝗶𝘁𝘆 𝗶𝗻 𝗔𝘀𝗶𝗮: Private equity in Asia offers significant advantages over Western markets due to lower reliance on debt and higher growth rates in sectors such as healthcare and IT. This makes the region an attractive investment option, particularly considering diversification and long-term return benefits.

As Asia continues to be a driving force in the global economy, understanding the nuances of its private equity market is crucial for investors seeking to diversify and optimize their portfolios.

To learn more about Asian private equity, leave us a message below or reach out to us directly. We also have a few hard copies to give away...

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