Side Letter: ICG sees signs of life, AP4 updates, the data on WFH

How is everyone getting on working from home? Getting the job done, but missing your colleagues, says a survey from MJHudson. Here's today's brief, for our valued subscribers only. 

He said it

“We have […] seen an early rebound in investment activity as lockdown measures have eased and business activity resumes. This bodes well for next year’s fundraising prospects.”

Benoît Durteste, CEO of listed investment firm ICG, celebrates signs of life in fundraising and investment in the firm’s quartely trading statement to the end of June.

Just happened

Missing the office, LP comms, DIY haircuts

Asset management consultancy MJHudson has published a study that revealed how months-long working from home has affected private markets professionals’ career, lifestyle and relationships, an extension to the research it conducted pre-pandemic. Here are some key findings:

  • Beyond decreased efficiency and client interaction, the biggest threat to many firms from remote work is that it breaks social bonds necessary for teamwork – nearly two-thirds said they missed working in the office. When asked what they missed, 82 percent said their colleagues, far more than anything else.
  • But: 71 percent of respondents said WFH was having no negative effect on their ability to communicate with colleagues.
  • What are the most frequently cited compromises with the current remote set-up? Most (54 percent) point to smaller or fewer screens, sub-optimal, improvised desks (51 percent) and unsuitable chairs (49 percent).
  • Meanwhile, 91 percent of limited partners say they are currently “open for business”.
  • Respondents also noted some instances of WFH fails including seeing investors in bathrobes, pets disconnecting Zoom calls and some “interesting DIY haircuts”. Also: “Got caught in my pyjama bottoms with a dress shirt. Made the mistake of standing up to get some coffee.”
  • The future? 73 percent of respondents think more private markets people will WFH more often. And, 57 percent say they will travel less for business.

The full report can be downloaded here.

They did the math

Call me. How GPs communicate with LPs in a crisis will shape their reputations. This is particularly true of North American investors.

Essentials

Junca’s new gig

Former Blackstone private wealth chief Pilar Junco, who last year joined Spanish firm Altamar Capital Partners, has been appointed to the board of Hg Capital‘s listed vehicle (press release here).

CD&R’s pandemic playbook

ICYMI: Here’s how US buyout giant Clayton, Dubilier & Rice plans to invest during the pandemic. It will take a similar approach to its post-GFC playbook by investing in growth opportunities followed by a lot of bolt-on M&A. Investments could involve a variety of terms including minority stakes, convertible preferred shares and standstill provisions to restrict ownership. Read Carmela’s full report here.

AP4 update

Swedish state pension fund AP4 released its interim report for 2020 yesterday (full report here). Overall the SKr403 billion ($45 billion; €39 billion) pension fund suffered a -2.5 percent investment return over the first six months of the year. There is little in the report about PE, but it does mention (without identifying them) a number of unlisted investments as part of its actions as a responsible investor. These are: an investment company that will help Swedish companies through the covid-19 crisis; a fund that focuses on food supply; and a PE fund that “is investing on a commercial basis in unlisted medium-sized companies that are making positive contributions to the UN’s Global Sustainable Development Goals.” The report also notes that previous plans to allow the pension to make direct co-investments alongside PE managers, as well as invest in private credit, came into force in May.

Dig deeper

Institution: Cathay Life Insurance
Headquarters: Taipei, Taiwan
AUM: NT$6.21 trillion

Cathay Life Insurance has confirmed an $50 million commitment to Oaktree Opportunities Fund XI. The fund is managed by Oaktree Capital Management and listed a target size of $15 billion.

Cathay Life’s recent private equity commitments have been made to funds that focus on buyout and venture capital strategies across several regions.

For more information on Cathay, as well as more than 5,900 other institutions, check out the PEI database.


Today’s letter was prepared by Toby Mitchenall with Carmela Mendoza.