Future 40 Q&A: What challenges lie ahead?

What changes can we expect in private equity over the next decade? We asked a panel of our 40 Under 40 Future Leaders of Private Equity for their views.


Audinga Besusparyte (Senior Director, Private Equity – PSP Investments)

Ted Cardos (Partner – Kirkland & Ellis)

Louis Choy (Principal, Secondaries, Private Equity – CPP Investment Board)

Ted Craig (Partner – Dentons)

Elizabeth Di Cioccio (Partner – Mercury Capital Advisors)

Sandro Diazzi (Director – Praesidium SGR)

Louise Dumican (Managing Director – The Carlyle Group)

Marcus Frampton (Chief Investment Officer – Alaska Permanent Fund Corporation)

Raphaëlle Koetschet (Head of Funds Investments, Private Equity – Caisse Des Dépôts)

What’s the single biggest challenge facing your sector?

Louise Dumican: Diversity – but I’m so happy to see this being placed firmly on the agenda.

Ted Cardos: Attempts to standardise what are very bespoke secondaries transactions.As GP-led liquidity solutions have become more common, many participants assume that solutions or approaches from prior deals will be suitable or appropriate for others, which is frequently not the case.

Ted Craig: Political uncertainty and the consequential legal and regulatory uncertainty. While the uncertainty remains, we will continue to play what’s in front of us.

Raphaëlle Koetschet: Large capital flows to come into private markets, lack of memory (even though most of us have been through at least a cycle), digital disruption if not dealt with, managing generational changes and strong egos.

Marcus Frampton: The challenges of recruiting today is one of the largest. I feel like we provide a terrific learning opportunity for analysts and associates here at APFC, but I have noticed a clear increase in the challenges toward recruiting. I attribute this to today’s tight labour market.

Audinga Besusparyte: This is a time of accelerating change where most industries face disruptive challenges, fundamentally stemming from technological change. It is getting harder to predict the combined effect of multiple non-linear trends that a company faces. Combined with globalisation, I think we will increasingly witness “winner wins all” environments.

What issues keep you awake at night? 

Louis Choy: Ideas. The latest evolution of our secondaries business at CPPIB encourages idea generation as the core of the programme. It keeps me up because I’m constantly thinking, not so much because I’m worried!

Sandro Diazzi: I am often concerned about the impact of private equity on society as a whole. Is our capital going to create value that goes beyond financial gains? Are our investments supporting good businesses who are reshaping our society? The other item that is often on my mind is diversity: we live in a white-male dominated industry and I am a big supporter of increasing gender/ethnicity-parity and being the catalyst for other industries.

Elizabeth Di Cioccio: In all honestly, sometimes my six-month-old son, Galileo, keeps me up! However, for many years before he was born, I was probably even more preoccupied and nervous about the demands of raising a child and having a developing career with a rigorous travel schedule.

MF: Maintaining liquidity and having dry powder to be aggressive with new private equity investments should the cycle turn is my top consideration today.

LD: I’m a lawyer – everything! The reliability of diligence – be it in emerging markets, the less professionally advanced companies or on issues that are hard to get a true sense of in advance – like the culture and tone of a business you’re acquiring

AB: I am optimistic about the world and our future, but am, of course, conscious that we are facing some new and important challenges. The two I would single out are environmental sustainability and the rise in social inequality with high levels of job automation expected over the long run.

TC: Trying to keep the pace of my clients, who are all growing at breakneck speed! In a niche market finding, training and retaining talent is a full-time job.

How is the LP-GP relationship changing?

MF: The advent of co-investing and direct investing has really changed things. We have so much more nuanced and deep relationships with our GPs now that we pursue deals alongside them. The LP-GP dynamic was more bifurcated in the past.

EDC: An increasing number of LPs are stating a preference to consolidate their private equity portfolios by establishing deeper relationships with fewer GPs. This is resulting in a competitive dynamic to get into a finite number of private equity funds.

TC: GPs and LPs are collaborating more and more during the fund’s life, seeking solutions (both GP-led and LP-led) to issues facing private funds. The dynamics of the GP-LP relationship in these situations really are fascinating.

LC: LPs are now focusing more on conflicts and at times suggesting secondaries solutions to the GPs. This is encouraging.

SD: In an environment where capital is commoditised, GPs care more and more about working with LPs who they can trust, who can be there in good and bad times: having a stable set of LPs is key. GPs are also increasingly looking at value-accretive LPs, where they can add real value to their portfolio companies.

LD: It seems to be merging. We’re having many more conversations with LPs as direct co-investment partners, with seats alongside us on the board and with a much deeper level of involvement, scrutiny and governance oversight than we’ve seen historically.

Which sectors/regions are you most excited about?

LD: I cover all sectors, but, having recently located to New York to cover the Americas, I’m most excited about this region as I am constantly learning so much and it presents a great new challenge for me personally.

EDC: I have always been most excited about managers who invest in truly undercapitalised niches. By deploying capital in areas where there’s a relative lack of competition, there should be the opportunity to generate enhanced returns (and usually structure downside protection).Unfortunately, it’s usually more difficult to raise capital for these themes as well, since they are unusual and not on the radar of most LPs.

MF: One area we’ve been really excited about in the past year is co-investing with our private credit managers, while infrastructure and co-investments have become a bit saturated in the past several years. Today the co-investing opportunity in private credit is fairly wide open. At this point in the cycle we also like the prospect of being more senior in the capital structure.

RK: More than sectors or geographies, it is strategies with a clear value-focus, be it transformative buy-and-build strategies on the traditional buyout segment, growth equity which today offers buyout-like returns without the need for high leverage but also strategies that bear some operational complexity (carve-outs, PtoP, etc.).

LC: For me, it’s not any particular sector or region, but it’s the general evolution of the market. When I started in secondaries the LP secondary market was starting to grow. Now it’s so much more than just LP secondaries and the remit has expanded significantly.

TC: Growth of single-asset transactions, as the universe of possible deals is nearly limitless.

Who is your biggest single inspiration and why? 

MF: I find managing money for a fund like APFC that is so meaningful to the community in Alaska very inspirational.

EDC: As a Middle East-based placement agent representing global funds, I’m fortunate enough to interact with a wide range of GPs and LPs from incredibly diverse backgrounds and different skills sets. This is a truly unique position, and I inadvertently learn something from every one of these individuals!

LD: Most recently I am inspired by my sons – they keep me in touch with what matters and, being always conscious of what I model to them, that offers a point of reflection that I never had before.

TC: My recently-passed grandmother. She was a whirl of activity, constantly reinventing herself – working until her 90s even after losing her sight in her early 80s. She never slept more than five hours a day; so corporate law would be a walk in the park for her.

RK: It’s probably not a “who” but a “what” and it would be reading non-fiction. For me, the most inspirational books are true stories.

AB: I would love to see the world where the best ideas win. We are clearly not there yet, but I try to do my part, from becoming more conscious of my own intrinsic biases to getting involved in industry events around diversity.

LC: My mother. She has worked really hard to ensure the best future for my brother and me, and it hasn’t always been easy. She always focused on education and wanting the best for us.

SD: My father. He never finished high school, was a “rebel” to society and did not believe in belonging to society as we are taught, but managed to become the head of a semi-government-owned company. He spent all his life helping entrepreneurs grow their businesses in good and tough times. He taught me the values of being honest, nice and having a purpose in what you do.

What is the best advice you ever received?

RK: Worry less about what people think about you and turn off the negative mental chatter: it only restrains one’s ability to dare. And as importantly, dare to say yes, including to things you are not completely ready to do – that will make you test and grow your limits.

TC: From one Ted (Roosevelt) to another: “It’s not the critic that counts…”

MF: That no structure or valuation can fix a bad company to invest in or dealing with bad partners.

LC: Embrace change. It feels like I’ve had four different jobs at CPPIB, even though I’ve had the same role for the past six years. The group has continued to evolve and it regularly pushes me out of my comfort zone and offers great opportunities for me to step up.

TCr: I was told that as soon as you find something you care about, you should pour yourself completely into that thing.  If you do that, people will notice your dedication and good things will happen. It is simple advice, but it has resulted in an extremely varied and satisfying career up to this point.

EDC: The importance of curiosity. This is ultimately the driver of lifetime learning and will help to keep you professionally engaged and interested.

LD: Done is better than perfect (though I still find it hard!).

SD: Be kind – treat everyone well. In a world where being arrogant and ruthless is sometimes a bit too common, my karma is to be kind, within the office to my colleagues, to our investors, to the managers of the funds we invest in. Being kind pays you back a million times. Being kind is underrated.

The full Future 40 Leaders of Private Equity list can be found here.