Munich Private Equity Partners’ Post

US Private Equity (PE) activity is stepping beyond the curve, showcasing a resilient 54% growth. This defies global PE activity, which lags behind at 25%. A major contributor to this robust performance are 'hot-potato' deals, where ownership shifts frequently from sponsor to sponsor. The rising prevalence of public-to-private rotations also plays a pivotal role, as fund sizes continue to grow. Will routine value-creation be sufficient in this evolving landscape? Perhaps not. PE might have to employ more innovative levers, like GTM, to not only help build value at scale but to carve a distinctive identity in an increasingly crowded market. 🏢🚀 #PrivateEquity #MarketTrends #Growth https://lnkd.in/ghnrbgJi

Lower mid-market is our bread and butter!! 🚀🚀 nothing beats investing in what you truly believe in!! 🫡🫶🏼 #munich #fof #privateequity #lowermidmarket

🔎 𝐌𝐚𝐫𝐤𝐞𝐭 𝐂𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧𝐬 𝐛𝐨𝐨𝐬𝐭 𝐚𝐩𝐩𝐞𝐚𝐥 𝐨𝐟 𝐋𝐨𝐰𝐞𝐫 #MidMarket 𝐁𝐮𝐲𝐨𝐮𝐭𝐬 in overall still challenging fundraising environment Rede Partners LLP’s latest Liquidity Index for H2 2023 found out by surveying 120 institutional LPs worldwide – with Europe and North America standing out as favorite regions for investors.   𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫’𝐬 𝐩𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬 𝐢𝐧 𝐝𝐞𝐭𝐚𝐢𝐥 👇🏻   🙌 LPs continue to show strong interest in Lower #MidMarket Buyouts, with 50% planning to increase their exposure over the next 12 months (+8%pt compared to H1 2023). #MidMarket Buyouts are favored by 46% - also up by 8%pt.   🥇 Demand for the lower end of the #Buyout segment clearly surpassed Large Buyouts (10%) and other strategies such as Private Credit (with 31% in 3rd place), Growth Equity (21%) and Secondaries (14%).   🌎 LPs expressed a strong appetite to deploy capital into #NorthAmerican- and #Europe-focused funds as they value them as the world’s most mature and diversified PE markets. The US specifically is also seen as being somewhat insulated from the direct impact of geopolitical tensions and inflationary pressures.   𝐖𝐡𝐲 𝐚𝐫𝐞 𝐋𝐨𝐰𝐞𝐫 𝐌𝐢𝐝-𝐌𝐚𝐫𝐤𝐞𝐭 𝐁𝐮𝐲𝐨𝐮𝐭𝐬 𝐢𝐧 𝐟𝐚𝐯𝐨𝐫?   According to the study, LPs are seeking liquidity as pessimism prevails over exits 🌵 Small and Medium-sized companies are typically less dependent on a single exit channel i.e. IPOs as they can be sold through multiple routes to a large universe of strategic and financial buyers.   This structural advantage has also been reflected in our own fund of funds programs, where the number of exits in 2023 has remained constant year on year. On average, the capital invested has more than tripled across all company divestures over the past year.   ▶️ Link to the study in the comments!   #CapitalWithCharacter

Equities, particularly in the US, have been strong through the first half of the year. Mega-cap tech led the charge, but where do we go from here? Marc Pinto, Head of Americas Equities, and Lucas Klein, Head of EMEA and Asia Pacific Equities, explain why they expect a broadening opportunity-set that c help unlock new value for investors. See their key thoughts by swiping below and click here for their full insight ▶ https://ter.li/c0zhjm #JHI #JanusHenderson #BrighterFutureTogether #ClientsComeFirst #MarketGPS #MGPS #Equities #US Investing involves risk

With the FTSE250 (the mid market centric index of the UK) and FTSE 100 on bit of an upward trend these last few months, the new streamlined London listing rules will make things easier for financial backers seeing light at the end of the long exit tunnel. I found this three minute explainer from Raconteur | B Corp™ of those rules useful, with increased alignment with the approach taken in the US in areas like dual share structures which suit fast growing tech firms. The new rules kick in at the end of July in time for the what I think will be a busy Q4 as confidence across the deal markets improves: https://lnkd.in/exmDRdzk As a comparison, the Russell 2000 (the US equivalent for the mid market ) has also risen but it has been more volatile which makes IPO pricing harder.

Why do non-traditional #investors make fewer VC deals? Because of: 🤔 ▶ Arbitrage Strategy and Market Downturn ▶ Valuation Concerns ▶ Market Dynamics and Timing ▶ Exit Market Freeze ▶ Broader Market Trends The participation percentages for non-traditional #VCs in all deal counts comparing from 2023 to the first half of 2024: 1. Government and Sovereign Wealth Fund from 0.8% to 0.6% ⬇️ 2. Asset Managers from 6.8% to 8.1% ⬆️ 3. PE Investors from 11.4% to 10.1% ⬇️ 4. Other Tourist Investors from 12.6% down to 11.2% ⬇️ 5. CVC Investors from 23.6% to 23.3% ⬇️ The challenging exit environment, less attractive #valuations, longer times between funding rounds, and a generally cautious market stance have led to the shift. Big thanks to Kaidi, Emily, and Kyle for the invaluable insights and quantitative research.

The long-term outlook remains sound, but breaking the logjam will require more robust approaches to value creation and rapid innovation in liquidity solutions.   This is one of the main takeaways from Bain & Company's recent global private equity report and we couldn’t agree more.   Private equity firms are sitting on record amounts of dry powder but they are struggling to deploy it. With innovation, we can expect to see improvements to existing liquidity routes and new routes completely which will enable investors to put their capital to work and boost returns.   Read the full report here: https://lnkd.in/egHNqBC5   #PrivateEquity #PrivateMarkets #Technology #Fintech

▪️ UK small caps have experienced their 𝘄𝗼𝗿𝘀𝘁 𝗿𝗲𝗹𝗮𝘁𝗶𝘃𝗲 𝗱𝗿𝗮𝘄𝗱𝗼𝘄𝗻 𝗶𝗻 𝗼𝘃𝗲𝗿 𝟮𝟬 𝘆𝗲𝗮𝗿𝘀 – an underperformance of 38% - and currently sit 𝗼𝗻𝗹𝘆 𝟱% 𝗮𝗯𝗼𝘃𝗲 𝘁𝗵𝗶𝘀 𝗿𝗲𝗹𝗮𝘁𝗶𝘃𝗲 𝗹𝗼𝘄. ▪️ Sentiment remains extremely negative, despite 𝗨𝗞 𝗹𝗲𝗮𝗱 𝗶𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿𝘀 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗶𝗻𝗴 𝘁𝗼 𝗶𝗺𝗽𝗿𝗼𝘃𝗲. ▪️ Historically, small caps have started to 𝗼𝘂𝘁𝗽𝗲𝗿𝗳𝗼𝗿𝗺 at this 𝗽𝗵𝗮𝘀𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗰𝘆𝗰𝗹𝗲. ▪️ This sets up an 𝗮𝘁𝘁𝗿𝗮𝗰𝘁𝗶𝘃𝗲 𝗿𝗲𝗰𝗼𝘃𝗲𝗿𝘆 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆 𝗳𝗼𝗿 𝗨𝗞 𝘀𝗺𝗮𝗹𝗹𝗲𝗿 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀, with 𝗮𝘃𝗲𝗿𝗮𝗴𝗲 𝗼𝘂𝘁𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗶𝗻 𝗲𝘅𝗰𝗲𝘀𝘀 𝗼𝗳 𝟱𝟬% over the last 5 cycles. ▪️ Our UK Listed Smaller Companies Fund is 5% ahead of the benchmark in Q1 2024 and has outperformed by more than 5% pa since inception in 2006. To read more about George Ensor’s latest thoughts, click here https://lnkd.in/eSky4wZP for the quarterly and here https://lnkd.in/e5K2e9gg to learn more about the UK Listed Equities Smaller Companies fund. #UKsmallcap #smallercompanies #UKequities #activemanagement For professional investors only. Capital at risk.

Should you invest in public markets or private markets? The essence of public markets is the ability to buy and sell on demand. It’s very attractive knowing you can instantly buy a stock when you believe there’s an opportunity to be had, and to sell when that opportunity no longer seems as compelling, or you need to free up some cash. But liquidity also causes volatility. When investors can sell at whim, it can lead to herd mentality that can dramatically move stock values. Many investors are under the false impression that because there is a lack of liquidity, private market investments should be avoided. But the liquidity characteristics make private markets less volatile. Private investors must be more thoughtful in their decisions to buy given the higher investment minimums, and they have to be equally thoughtful about selling. Lock-up periods and quarterly redemptions not only serve to prevent funds from being withdrawn on a moment’s notice, but they also force investors to think outside of the day-to-day tumult. Read more in our latest article: https://hubs.la/Q02dv0wy0 Contact us to learn more about Fairbridge Asset Management and our approach to diversifying your portfolio with public market and private market investments at info@fairbridgellc.com #realestatefinancing #bridgeloans #bridgeloans #bridgelending #RealEstateBridgeLoans #AlternativeInvestments #fairbridge #commercialrealestate