They said it
“The best predictors of success of our portfolio [during this time] is the quality of the technology stack of that portfolio company, the size of the addressable market and the focus on unit economics and scalability… if you get any of those other things wrong, the company is going to fail regardless of inflation.”
Navneet Govil, managing partner and chief financial offer at SoftBank Vision Fund, discusses the threat inflation poses to VC funds at this year’s virtual PEI CFOs & COOs Forum.
Five key takeaways from Coller Capital’s latest LP survey
LPs are keen to continue allocating to private markets, even as their perceived risk to returns has risen materially over the past 18 months. That’s according to Coller Capital‘s most recent Global Private Equity Barometer, a snapshot of worldwide trends in private equity, out this morning. This, the 34th edition of the report, captures the views of 111 private equity investors, representing a globally diverse LP population. Here are five key takeaways:
- While trade wars/geopolitics remains the highest perceived risk to returns, the percentage of LP respondents who viewed regulatory changes and changes to taxation as significant risks nearly doubled from last winter to 70 percent and 63 percent, respectively.
- Two in five LPs anticipate they will refuse re-ups at a faster rate over the next few years, with a clear majority citing individual managers’ weak returns as the reason why.
- Nearly half of LPs believe robust ESG policies will boost returns, whereas only one in 10 think it would actively harm returns.
- Three quarters of LPs are invested in secondaries. One fifth of LPs surveyed plan to boost their allocation to PE secondaries, and 15 percent to other asset class secondaries over the next three to five years.
- 74 percent of LPs indicated that if they were to change their co-investment policies over the next few years, it would be to allocate more capital to the strategy.
Europe’s FoF to watch
We caught up on Wednesday with Altamar CAM Partners, the €14 billion European private markets manager brought about by the merger of fund of funds managers Altamar Capital Partners and CAM Alternatives this month. Readers may recall our interview with Altamar’s co-chief executive and co-CIO José Luis Molina last August in which he had said the firm expected to double it AUM to up to €15 billion over the following five years. The firm is clearly set to achieve its goal sooner than planned. The new AUM goal is €25 billion in five years’ time, Altamar co-founder Claudio Aguirre tells Side Letter. A key part of that “ambitious, realistic and achievable goal” is expanding Altamar CAM’s private wealth reach from its mainly Spanish and LatAm clients to the rest of Europe. New combined offerings are also in the pipeline. We’ll have more on the interview with Aguirre and CAM’s co-chief exec and founding partner Rolf Wickenkamp this week.
They did the math
China’s bullish secondaries shops
Side Letter recently heard of a large secondaries firm launching a yuan-denominated fund, and fresh data makes it clear why. Chinese secondaries transactions rose 39 percent to 26.4 billion yuan ($4.1 billion; €3.41 billion) last year, according to intermediary Zerone. Though secondaries funds dominate the western buyside, individuals and corporates are most active in China – a dynamic that may change if more dedicated vehicles emerge. We examine the driving forces behind Asia’s burgeoning secondaries market here.
Fund finance Down Under
On Friday, Private Equity International broke the news that Macquarie Group has recruited a former Investec boss to spearhead its push into APAC fund finance. Steven Mansy will serve as head of fund finance origination for the region. Niche forms of lending such as NAV-based facilities have transitioned to mainstream during the pandemic. Australia’s tastes are a little more vanilla, and the bank is hopeful that providing traditional capital call facilities Down Under will translate to more complex loans down the line.
LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.
- California Public Employees’ Retirement System
- Chicago Firemen Annuity & Benefit Fund
- Oklahoma Police Pension and Retirement System
- State of Wisconsin Investment Board
- Missouri State Employees Retirement System (MOSERS)
- Chicago Municipal Employees’ Annuity and Benefit Fund
- Chicago Teachers’ Pension Fund
- Iowa Public Employees’ Retirement System
- San Diego County Employees’ Retirement Association
- Teachers’ Retirement System of the State of Illinois
- Texas County and District Retirement System
- Alaska Retirement Management Board
- Japan Post Bank
- Illinois State Board of Investment
- Jacksonville Police and Fire Pension Fund
- Lancashire County Pension Fund
- New Hampshire Retirement System
- Oklahoma Firefighters Pension & Retirement System
- School Employees’ Retirement System of Ohio
- State Teachers Retirement System of Ohio
- Michigan State University
- Kent County Council Superannuation Fund