Finanzplatz Frankfurt am Main’s Post

Is PE actually worth the effort/risk/time/illiquidity/etc.? Yes, it actually is worth it if you know what you are doing and get exposure to the best in class because there is no index to invest to get the quoted returns like you can in the public markets (we are working on building one but until then there is none apart from an index for listed PE managers' stock). Will be presenting on this very topic at the USA-Europe Invest Summit in Madrid (April 8-10) and demonstrate a simple strategy that always work to get exposure to the alpha present in private markets (please see the link below for the conference). Look forward to meeting anyone interested. https://lnkd.in/eZwHP3Wz #privatemarkets #privateequity #privatecredit #privatedebt #privatecapital #privatelending #venturecapital #venture #vc #vcfunding #tech #lmm #growthcapital #growthequity

Short answer is Yes, but one has to know where to invest within ‘PE’ and private markets especially given that the party is over (and gates are open) and the after party is just getting started for the select invitees. Good selection of links to academic and white papers about PE returns (in the FT piece below) as well as a discussion about why NBIM has chosen to write home about wanting an exposure in private markets (for outsized growth and return opportunities which they can no longer get exposure via public markets - recent data shows in the US number of private companies with 50 employees have reached 280K whereas number of public companies have fallen to around 4,000). Also, the smoothing effect of illiquid investments given highly volatile markets could be a good selling point for many large and slow-moving institutional investors. Even if the jury is still out on whether they have been getting a premium for illiquidity or not. My humble take is that, if you want to get paid a premium for ‘illiquidity’ you have to know where to look (and get invited to the after party); in private markets, unlike in public markets, top GPs deliver persistent performance (at least they did pre-2005 as per the paper quoted here too, but not anymore apart from a selective few as per our experience), also know how to ‘manage fees’ and make co-investments a part of the long term strategy all help boost those net cash on cash returns even in a crowded market where private is not that private anymore.

🚀 𝐄𝐱𝐜𝐢𝐭𝐢𝐧𝐠 𝐠𝐫𝐨𝐰𝐭𝐡 𝐢𝐧 𝐭𝐡𝐞 𝐆𝐞𝐫𝐦𝐚𝐧 𝐟𝐮𝐧𝐝 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐲! As of March 31, 2024, the assets under management (AuM) have soared to an impressive EUR 4,289 billion, a 9% increase year-on-year. 📈 𝐄𝐪𝐮𝐢𝐭𝐲 𝐟𝐮𝐧𝐝𝐬 𝐬𝐮𝐫𝐠𝐞: Equity funds have expanded dramatically to EUR 680 billion, increasing their portfolio share from 36% to 47% in just five years, thanks to a bullish stock market. 🏅𝐁𝐨𝐧𝐝 𝐟𝐮𝐧𝐝𝐬 𝐥𝐞𝐚𝐝 𝐬𝐚𝐥𝐞𝐬: Bond funds lead the charge with EUR 5.4 billion in new business, with a strong focus on short-term bonds. 🔝 𝐒𝐩𝐞𝐳𝐢𝐚𝐥𝐟𝐨𝐧𝐝𝐬 𝐝𝐨𝐦𝐢𝐧𝐚𝐧𝐜𝐞: Spezialfonds, catering primarily to institutional investors like retirement schemes and insurance companies, now manage EUR 2,125 billion, with a growing trend towards outsourcing portfolio management. 💰 𝐒𝐭𝐫𝐨𝐧𝐠 𝐐1 𝐈𝐧𝐟𝐥𝐨𝐰𝐬: The first quarter of 2024 alone witnessed a net inflow of EUR 21.7 billion, with open-ended Spezialfonds drawing EUR 9.5 billion. Equity and bond ETFs also made significant contributions, collectively adding another EUR 5.4 billion. At Universal Investment, we are excited to see such robust growth in our home! If you are looking to enter the thriving German fund market and need a reliable partner with strong connections, contact our experts Marcus Kuntz, Dirk Grosshans or Max Gutsche. Let's explore how we can support your ambitions and drive success together! The facts and figures featured in this post are accessible on the BVI Deutscher Fondsverband website. #GermanFundMarket #DrivingOurClientsSuccess

Here's a roundup of the latest news in #PE: 1/ German Economy and Private Equity: Chancellor Olaf Scholz is committed to modernizing the German economy, supporting vital industries like chip factories, despite budget challenges. 2/ Media Industry Movements: Shareholders of French TV production group Mediawan are considering a takeover of Germany's KKR-backed Leonine Studios, potentially valuing the combined entity at up to €3 billion. 3/ Norway's Wealth Fund Eyes Private Equity: Norway's $1.5 trillion sovereign wealth fund, the world's largest, is advised to include private equity investments, potentially allocating up to $70 billion. 4/ Cryptocurrency and Private Equity: "Layer 2" cryptocurrencies, built on top of blockchains like Bitcoin and Ethereum, are gaining momentum, indicating a rising interest in crypto-related private equity ventures. 5/ European Tech Startups Funding: Total capital invested in European tech startups is projected to fall to $45 billion this year, a significant decrease from 2021's $100 billion. 6/ Lotus Technology's Big Move: Lotus Technology, the luxury electric vehicle arm of sports car brand Lotus, has secured $870 million in financing ahead of its merger with L Catterton Asia Acquisition. 7/ Private Equity in Politics: The conservative U.S. political network led by billionaire Charles Koch has endorsed Nikki Haley for the 2024 Republican presidential nomination, highlighting the intersection of private equity and politics. 8/ Global Investment Summit: Over 200 CEOs and investors, including James Brocklebank of Advent International, are attending the Global Investment Summit at Hampton Court Palace, discussing private equity's role in fueling growth. 9/ UK Pension System Reform: The Chancellor's Autumn Statement continues efforts to reform the pension system, aiming to encourage more investment in UK start-ups, infrastructure, and listed equities. Follow us for more insights! #PrivateEquity #privateequityfunds #financialmarkets #finance #sirotinventures

Enrico Letta's report has sparked new discussions on asset allocation and the need to finish (or start, if you are more cynical) a capital markets union within the EU. Apart from an important rebranding into 'savings and investments union', it contains the to strengthen Europe's financial markets and stresses the need to finance Europe's long-term goals, such as the green and digital transition, and more relevant than ever, its defense. EFAMA and AFG (European and French asset manager organizations) joined in the call for an increased allocation to European assets over that of American companies. "European money should fund Europe", one might say. This overallocation towards US equity does make sense, as 70% of global equity is American. Especially with passive investing, a lot of money will be allocated in the US. The latter, I think, is precisely why we need a larger and more competitive capital markets union with more liquidity. It is easy to say we are financing the US, but to solve this (at least in part), we, as Europeans, must invest more, too. As Simon points out regularly - we have a vast amount of assets misallocated in unproductive accounts. If we keep on saving instead of investing this status quo remains. On a little side note, the call for a home bias fits in a trend with the Mansion House call for long-term investments in Britain, the Dutch call for pension funds to invest in defense, and now the call for 'Europe first'. https://lnkd.in/eD3BDUqz

As of today, 1 March 2024, the L-QIF - new type of investment fund reserved to qualified investors in Switzerland - will be available on the market. The introduction of the L-QIF is the opportunity for the asset management industry to offer new innovative products and strategies. Our article details the advantages and key differences with its Luxembourg cousin (RAIF) Any questions? reach out to us: Clara Morhange Patrick Fitzgerald Darko Stefanoski Christian Röthlin Silvia Devulder Sandor Frei #fundsmanagement #assetmanagement #switzerland #ey

This is an interesting and relatively comprehensive view on Private Equity returns, with a specific focus on whether the Norway Oil Fund should diversify into the PE asset-class. The author recommends no. Adjusted returns are similar, if not worse than public market returns, depending on the study and the analysis framework. A Said Business School paper essentially concludes that the biggest benefactors of the PE asset class are the PE tycoons, stating that "the number of PE multibillionaires rose from 3 in 2005 to 22 in 2020." And given concentration of capital, higher competitive intensity, and limited deal-flow, the future looks even more dubious as an asset class. Beyond fund returns, the question of whether PE actually creates long-term value for the companies/ assets it invests in is ambivalent at best. One NBER study shows "little evidence that PE-owned firms outperform public firms in profitability or operational efficiency." A recent Goldman Sachs analysis demonstrates that PE "alpha" has an almost negligible effect on the total value added. This obviously doesn't mean that value isn't created for certain companies. But all the historical levers: leverage, incentives, focus, market expansion, EBITDA expansion, etc., are essentially table-stakes now. Technology and AI may yet be the next frontier to drive new value creation. In US healthcare industry, for example, PE investments in hospitals and hospital consolidation have correlated with worse healthcare outcomes. The financial engineering may have squeezed out a few extra points of returns for investors and management, but at the expense of patients and consumers.

German fund industry grows by 9 per cent year-on-year: ◾ Equity funds are the largest group ◾ Bond funds top the sales list ◾ Spezialfonds: Outsourcing of portfolio management is widespread Fund companies had a total of EUR 4,289 billion AuM for investors in Germany as at 31 March 2024, an increase of nine per cent in the last twelve months (31 March 2023: EUR 3,922 billion). This means that assets are only slightly below the all-time high of EUR 4,311 billion at the end of 2021. The majority, at EUR 2,125 billion, is attributable to open-ended Spezialfonds for institutional investors. These are primarily retirement benefit schemes (EUR 748 billion) and insurance companies (EUR 543 billion). The fund companies manage EUR 1,459 billion in open-ended retail funds. Equity funds account for EUR 680 billion of this total. Their share has risen from 36 to 47 per cent in the last five years, mainly due to the rise in stock prices. Next come balanced funds with EUR 350 billion and bond funds with EUR 217 billion. Their share fell from 28 to 24 per cent and 20 to 15 per cent respectively. The net assets of property funds totalled EUR 129 billion. In the first quarter of 2024, the fund industry received a net inflow of EUR 21.7 billion in Germany. Open-ended Spezialfonds accounted for EUR 9.5 billion of this. Open-ended retail funds attracted EUR 3.8 billion. This is above the average value for the quarters in 2023 (EUR 3.2 billion). For further information, please see the press release: ▶ https://lnkd.in/ec7qJa56 Peggy Steffen Christiane Lang Frank Bock Volker Weber Magdalena Kuper Kai Schulze Yvonne Schulz Sebastian Oys Christian Anger Moritz Bartsch Rudolf Siebel Felix Ertl Daniel Mettlach Marius Seibert Jenny Seydel Marc Bubeck Sebastian Krämer- Bach Klaus Papenbrock Dr. Sinan York Temelli Cvetelina Todorova Jasmine Carolin Schimke #share #funds #bonds

New EU rules on the European Long-Term Investment Fund (ELTIF) could open #privatemarkets to everyday investors, potentially resulting in up to €100 billion of new investment over the next five years. But what exactly is changing? And what can 'ELTIF 2.0' offer to individual investors? Discover more in our latest blog post. #ELTIF