Your Experts for the European Market

🌞 30°C and a buzzing crowd in Zurich – it must be time for our annual tradition at @Private Equity Insights! This week, POLARIS Managing Partner @[Stefan Brägger](urn:li:person:tz4DJW2pSM) had the pleasure of moderating the panel "𝐋𝐏 𝐏𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬: 𝐀𝐧𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐍𝐞𝐱𝐭 𝐖𝐢𝐧𝐧𝐞𝐫" at PEI Zurich.

A big thank you to our LP panelists – @[Cyril Demaria](urn:li:person:639bkeYPlU), @[Marie Pestalozzi](urn:li:person:l9MJFaqwHO), @[Marina S.](urn:li:person:NyyT1dD6qQ), and @[Laurent D.](urn:li:person:5ijoF\_\_Ggd). The discussion was candid, timely, and rich with insight. Here are our key takeaways:

🔹𝐌𝐚𝐫𝐤𝐞𝐭 𝐭𝐢𝐦𝐢𝐧𝐠 𝐢𝐧 𝐏𝐄 𝐫𝐞𝐦𝐚𝐢𝐧𝐬 𝐚 𝐦𝐲𝐭𝐡 – consistent deployment across vintage years, not short-term timing, is still the winning strategy, according to our panelists.
🔹𝐄𝐮𝐫𝐨𝐩𝐞’𝐬 𝐦𝐨𝐦𝐞𝐧𝐭?While the U.S. still dominates many LP portfolios, Europe has delivered stronger realized performance over the past five years. Sentiment is improving, with multiple European GPs recently raising oversubscribed funds.
🔹 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 – helpful or harmful? Public initiatives like the Tibi program in France aim to drive local innovation, but they can also distort markets and lead to suboptimal outcomes. It's a double-edged sword.
🔹 𝐋𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐫𝐞𝐦𝐚𝐢𝐧𝐬 𝐭𝐢𝐠𝐡𝐭 –unconventional exits and continuation funds are still viewed cautiously by LPs, unless there's clear alignment and value for all stakeholders.
🔹 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐞𝐧𝐠𝐢𝐧𝐞𝐞𝐫𝐢𝐧𝐠 𝐢𝐬 𝐨𝐮𝐭; 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐯𝐚𝐥𝐮𝐞 𝐜𝐫𝐞𝐚𝐭𝐢𝐨𝐧 𝐢𝐬 𝐢𝐧 –our panelists agreed that the winning playbook has changed. With leverage and multiple expansion less available going forward, true value creation must come from growth and transformational strategies. 
🔹 𝐓𝐨𝐩-𝐝𝐨𝐰𝐧 𝐬𝐞𝐜𝐭𝐨𝐫 𝐭𝐡𝐞𝐦𝐞𝐬 𝐦𝐚𝐭𝐭𝐞𝐫 –LPs are increasingly focused on adding sector specialists to their \(mature\) portfolios. Energy transition, industrial tech, and healthcare were identified as attractive investment opportunities and potential future winners. 
🔹 𝐇𝐞𝐚𝐥𝐭𝐡𝐜𝐚𝐫𝐞 𝐢𝐬 𝐚 𝐡𝐨𝐭𝐬𝐩𝐨𝐭 – demographic trends, rising digitization, and inefficiencies offer investment potential, particularly in tech-enabled and value-based care. But high valuations and regulatory complexity require disciplined underwriting.
🔹𝐒𝐦𝐚𝐥𝐥 𝐚𝐧𝐝 𝐦𝐢𝐝-𝐜𝐚𝐩 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞 –these segments have historically outperformed during downturns and offer greater exit flexibility compared to large-cap buyouts.

👋 A huge thanks to the audience who chose our session over two others – and to our panelists for the thoughtful exchange. And of course, thank you to Private Equity Insights for the kind invitation and for hosting another standout event in Zurich!

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📝 𝗣𝗢𝗟𝗔𝗥𝗜𝗦 and Axiom Asia Private Capital are excited to have contributed to the latest Absolut\|private edition by Absolute Research: Our article, "Asiatisches Private Equity im institutionellen Portfolio," delves into the exciting investment opportunities presented by the robust growth of Asian economies.📈

Authored by Alex Sao Wei Lee, Debbi Sutuntivorakoon, and Ernest Ong from Axiom Asia, alongside our very own Rolf Dreiseidler from POLARIS, this paper offers valuable insights into the current geopolitical and macroeconomic landscape of the region. We explore the significance of Asia for institutional investors and present strategies to capitalize on the region's growth potential. 🇩🇪 While the article is in German, we highly recommend downloading the e-paper from the Absolute Research website to access this insightful content:👉 https://lnkd.in/eCN\_MZcN

𝗔 𝗳𝗲𝘄 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗮𝗿𝘁𝗶𝗰𝗹𝗲:

1️📈 𝗔𝘀𝗶𝗮'𝘀 𝗚𝗿𝗼𝘄𝘁𝗵 𝗠𝗮𝗿𝗸𝗲𝘁: Asia, home to 60% of the world's population and projected to hold 65% of the global middle class by 2030, is a dynamic growth market with GDP growth forecasts for countries like India, Indonesia, and China significantly higher than those of the Western world.

2️🌏 𝗨𝗦-𝗖𝗵𝗶𝗻𝗮 𝗚𝗲𝗼𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗧𝗲𝗻𝘀𝗶𝗼𝗻𝘀: The geopolitical tension between the US and China, especially regarding Taiwan, remains a challenge. However, the strong economic interdependence between China and Taiwan mitigates potential conflicts and supports the current status quo.

3️💼 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗘𝗾𝘂𝗶𝘁𝘆 𝗶𝗻 𝗔𝘀𝗶𝗮: Private equity in Asia offers significant advantages over Western markets due to lower reliance on debt and higher growth rates in sectors such as healthcare and IT. This makes the region an attractive investment option, particularly considering diversification and long-term return benefits.

As Asia continues to be a driving force in the global economy, understanding the nuances of its private equity market is crucial for investors seeking to diversify and optimize their portfolios.

To learn more about Asian private equity, leave us a message below or reach out to us directly. We also have a few hard copies to give away...

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