RIAM Alternative Investments provides private equity investment advisory and management services to family offices and institutional investors. The Frankfurt-based fund’s managing partner Philippe Roesch speaks to Private Equity International about LPs’ challenges in investing and his concerns for the market.
What type of manager does RIAM typically back?
We back top decile late-stage, growth and buyout fund managers in Europe and opportunistically in other geographies or with other investment focuses such as sector funds and distressed situations. We are looking for high and sustainable returns over a couple of fund generations and hands-on private equity managers.
Is it a challenge, as an LP, to invest in private equity at the moment?
Yes, as we feel that many segments of the private equity industry currently show an imbalance between capital inflows and capital deployment. Altogether, there is currently $1 trillion of dry powder available, especially in the areas of mega and large buyouts, infrastructure and generalist secondaries funds, among others.
How does RIAM access the secondaries market?
We look for LP stakes in funds or funds of funds as well as direct portfolios of companies our clients could purchase. Some of our clients are also potential investors in secondaries funds.
That market has taken off in the last few years: do you think it will meet investors’ expectations?
It depends on which expectations we are speaking about: returns, duration, liquidity? I think that we might see declining returns due to high purchase prices at the peak of the cycle as well as longer durations and holdings in a market that will become more liquid and transparent.
[GP-led restructurings are] definitely a growing segment as GPs now take advantage of the secondaries market to manage their LP roundtables as well as fundraisings.
What is your biggest current concern relating to private equity?
[There is] too much money in some segments of the market, too much regulation for smaller managers and many LPs.
Philippe Roesch has been with RIAM since 2011. He was previously head of private equity Europe at Auda Alternative Investments, now HQ Capital, where he generated primary and secondaries dealflow.