What’s your sense of what the biggest challenge is for LPs at the moment?
The rapid deployment of some of our peers – ourselves as well but in particular, some of our peers – and what it does to their budgets and allocations of LPs. They have a certain target for private equity and private equity has done really well. That’s the numerator effect.
On top of that, you’ve got a bunch of GPs, instead of sticking to a three- or four year cycle, doing it at 12-18 months, which creates another headache for them. The problem with just deploying a fund in 12 to 18 months is you’re creating a one-year vintage. Who knows what 2021 will be like; in hindsight, it may not have been a great idea. That stresses them [LPs] out.
All of a sudden, if you got GPs coming [back] faster and for more, and you’ve got the squeeze in terms of how much LPs can actually further deploy into private equity, it’s forcing them to either cut back on relationships and/or just give less to people. They hate doing that because they don’t like having these conversations – it’s taken them years to build trust and relationships with a GP, and they also want to remain very relevant to a GP. Their concern is, if I go from here to a smaller commitment because you’ve pushed me, will I still be as relevant?
The North American public pensions market is pretty tapped out. Where do you see the next big source of LP capital coming from?
We feel that a market like Mexico should be very interesting. I was there last week. It’s tremendously exciting to see how that ecosystem is really opening up. They’re very smart investors – they know what they want and they know what they’re looking for, so it’s not a question of educating them about private equity.
I think we say that the US state systems tend to be tapped out, but there’s still some very large pools of capital there, whether it’s West Coast pension schemes, which I’m sure will continue to be net deployers. There’s also a tonne of family offices which have experienced significant wealth creation, especially in the last 10 years. They will take a much more entrepreneurial approach. They don’t have to answer to budget restrictions from the top, they’ll take a much more entrepreneurial approach to say: we understand the value proposition of alternatives and we’ll lean into that.
On a scale of zero to 10, to what extent has your in-person meeting schedule returned to pre-covid levels? Zero being not at all, and 10 being back to normal.
The biggest pent-up need to travel is towards Asia. We’d love to be in front of investors more than anyone else and especially in a time when we’re not fundraising, because we’re not, because that’s when you can have the more genuine conversations. If you put the caveat of Asia to one side, anywhere else is probably nine to 10; with Asia we’re still probably at a six.
If you had a magic wand, what one thing would you change about the private equity industry?
A more apples-to-apples comparison between GPs. It is a very hard thing to do. It’s very hard for us to benchmark ourselves against our peers. I can only imagine how hard it has been for some of our investors. I say that because it is a very nuanced industry. On the one hand you’re trying to be arithmetic and numerical; on the other hand, what you’re really backing is people and their judgment and it’s all about trust and confidence.
What’s the most enjoyable thing about your job?
I get to spend a lot of time with very interesting people, both internally and externally. Internally I’ve got 17 PE investment partners around the firm. They all have a different perspective. They all have a different sector specialism. Whilst they have a similar DNA and similar philosophy, they all get to the end result in deal making in a different way and it’s fascinating to their brains in action, how they go about doing their business.
What’s the least enjoyable part of your job?
I think the most frustrating thing about my seat or anyone who’s in capital raising is, more often than not, our investors are too polite or too distracted, or just don’t want to provide feedback straight away. We frequently don’t get a clear answer. And we don’t know whether we should keep on chasing because they’re busy or we should keep on chasing because tenacity is rewarded, or we’re ultimately becoming a burden and we’re a nuisance.
If I could change one thing in that respect, it would be, I’d love to get some clearer feedback, good or bad. You’ll have more authentic conversations.
What do you think you would be doing if you weren’t working in private equity or in finance in general?
My career as a car designer was cut short at a very young age for good reason. One thing that I would probably, if I had the luxury to do, is devote a bit more time and energy towards a cause that’s very close to my heart, which is autism. I have a young son who is autistic. If I had the luxury of time and if I had the luxury of devoting my energy and focus on it, I would very much like to do that, partly because it is such a mystery, because it’s so hard to define.
Alexis Maskell joined London-headquartered BC Partners in 2021 as global head of investor relations and is responsible for the capital-raising efforts of the firm across all strategies. He was previously at Citigroup where he was head of the financial sponsors group for EMEA.