🚀 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! 🤝
{hashtag|\#|PrivateEquity} {hashtag|\#|Fundraising} {hashtag|\#|LPs} {hashtag|\#|Investments} {hashtag|\#|SecondaryMarket} {hashtag|\#|IndustryInsights}
🎉 Congratulations to our esteemed Senior Advisor @[David Hansen](urn:li:person:7lp\_TzoSfy) and @[Sven Gralla](urn:li:person:OV\_sHkWJOY) as well as the entire LBBW Asset Management team for successfully organizing the LBBW Private Debt Day 2024! 👏
The innovative format offered valuable insights into the latest private debt market trends and provided a deep dive into the complexities of due diligence on PD managers, including hands-on DD exercises and actionable recommendations, such as key knock-out criteria and benchmarking strategies. 💡
A special thanks to @[Ture Invest](urn:li:organization:5901588), the leading Nordic direct lending manager, for their fascinating insights into the Nordic market dynamics. 🌍
𝗛𝗲𝗿𝗲 𝗮𝗿𝗲 𝗮 𝗳𝗲𝘄 𝗸𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:
1️⃣ Creditor-friendly legal systems in the Nordics allow for swift action— e.g. share pledge enforcement can be completed in just one day compared to 180 days in Italy or 210 days in Germany, helping creditors to intervene and to minimize losses quickly. ⏳
2️⃣ Private equity penetration in the Nordics \(PE investment as a percentage of GDP\) is twice that of the rest of Europe. While this might mean more competition for PE, it offers direct lenders more deal flow to choose from. 📊
3️⃣ Overall the Nordics' economic strength—characterized by stable growth, low debt levels, and a robust regulatory environment — makes the region a prime opportunity for direct lending investors. With a diverse economy and sound fiscal policies, the Nordics offer a low-risk, high-reward landscape for private debt investments. 💼
If you missed this insightful event but want to learn more, feel free to reach out to us or connect directly with @[David Hansen](urn:li:person:7lp\_TzoSfy). 📩
{hashtag|\#|PrivateDebt} {hashtag|\#|DirectLending} {hashtag|\#|PrivateEquity} {hashtag|\#|InvestmentOpportunities} {hashtag|\#|LBBWAssetManagement} {hashtag|\#|PrivateDebtDay} {hashtag|\#|TureInvest} {hashtag|\#|AlternativeInvestments} {hashtag|\#|NordicEconomy} @[LBBW Asset Management Investmentgesellschaft mbH](urn:li:organization:6076853)
