France-based fund managers are leaders in ESG investingLONDON, April 27, 2023 (GLOBE NEWSWIRE) -- Preqin, the global leader in alternative assets data, tools, and insights, published its Private Equity in France 2023: Preqin Territory Guide. Certain information contained herein constitutes forward-looking statements, which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," continue" or "believe" or the negatives thereof or other variations thereon or other comparable terminology. In 2017, for example, China represented 83 percent of fundraising in Asia, a share that dropped to 34 percent in 2022. January 31st, 2023. Vintage years beyond 2017 have been excluded as performance is less mature and may be too early to tell. Dieses Dokument ist ein Marketingdokument. For example, while China tech was initially a copycat play, Chinas Internet sector has surpassed the U.S. in several areas (e.g., mobile payments, online shopping). Changes in consumer behavior is no longer one of the top five factors of concern, decreasing to 17% this year from 26% in 2021%) as firms now have a better gauge of consumer reactions to the pandemic and have adjusted their strategies accordingly. Please consider the investment objectives and nature of risks before investing. And it's no wonder why, with its record performance in 2021. Retrieved from: https://www.spglobal.com/esg/insights/key-esg-trends-in-2022. For those that can identify and partner with such private equity managers, there exists a promising opportunity for outperformance in the region. While fundraising and investment performance declined, the industrys growth held reasonably steady, with assets under management increasing to $11.7 trillion as of June 30, 2022 (Exhibit 2). Private market valuation refers to round size, as determined by capital invested divided by no of deals. Anecdotally, as little as five years ago, many businesses in the region managed trucking logistics via paper on a clipboard. PE returns disappointed, recording the worst year (through September 30) since 2008, and PE ended a five-year run as the top-performing asset class. Please read and agree to the Privacy Policy. On aggregate those funds raised $845.5 billion capital across various strategies, with growth capital funds seeing the largest upsurge. One of real estates biggest draws for institutional investors is the long-held belief in the asset classs ability to protect real value during periods of higher inflation. A Private Equity Lens on the Energy Transition The global shift away from carbon-based fuels is gaining momentum. Exits in the region are notoriously complicated, as tighter public markets limit IPO options and geopolitical uncertainty clouds valuations. However, many are cautious of the growing inflation and rate hikes that may impede the unprecedented rate of investment activity. Conversely, only 18% of North American respondents see it as a hindrance, the smallest percentage across all regions. Amid current financial market volatility, investors are revisiting asset allocations in their portfolios, hoping to identify attractive market segments with upside potential. Global PE performance turned negative for the first time since 2008, posting a 9 percent return through September1As measured by year-to-date IRR as of September 30, 2022, for global funds vintages between 2000 and 2019. and ending a five-year run as the highest-performing private asset class. As overall GDP growth slows, efficiency improvement will become increasingly more important. In subsequent papers, the team will go into further depth on the region, covering topics such as the opportunity for venture capital in India and the current state of private equity in China. Second, LPs are increasingly incorporating ESG metrics into their capital allocation processes. The number of buyout and growth deals greater than $500 million decreased by 33 percent. Almost 17% of PE professionals from that region anticipate the investment landscape will deteriorate in 2022. However, in 2021, the Consumer sector saw the sharpest rise in deal value of all sectors, tripling $180.8billion in 2021 from $63.3billion in 2020 to[7]. Because of the deterioration in technology valuations, VC and growth equity returns led the fall, in stark contrast to the last several years. Australia: This material is disseminated in Australia by Morgan Stanley Investment Management (Australia) Pty Limited ACN: 122040037, AFSL No. 11 Bain & Company, "Asia-Pacific Private Equity Report 2022". MSIM, the asset management division of Morgan Stanley (NYSE: MS), and its affiliates have arrangements in place to market each others products and services. Concerns over start-ups' high burn rate and limited exit options caused by a global equity sell-off have extended funds' holding periods and slowed capital distribution. Another prevailing theme for the upcoming months to grow in significance will be digitalization. For illustrative purposes only. For more from Dry Powder on the report, you can listen to Three Essential Trends . Most of the current fund commitment decisions were made last year, which was impacted by the denominator effect as public markets . Infrastructure and natural resources (NR) overcame broader market headwinds in 2022 to set a new fundraising record of $158 billion (Exhibit 9). Institutional investors sought out the asset class for various features that are attractive in times of market volatility: current yield, floating rates, and relative insulation (via its senior position in the capital stack) from declining valuations. At $2.5 Bn, MSIM Raises One of the Largest Funds Focused on Single Asset GP-Led Continuation Vehicles. The authors wish to thank Sara Bernow, Brodie Boland,Sophia Braes, Jonathan Christy, Chris Gorman, Alastair Green, Sean Kane, Kayla Miele, Alexandra Nee,Robert Palter, Alex Panas, Jason Phillips, Adam Pulsipher, Jeff Rudnicki, and Rahel Schneider for their contributions. The Covid-19 pandemic re-emphasized the importance of localized operations, as closed borders made it impossible for non-local managers to undertake transactions. Download the Complimentary Report. And the ongoing war and humanitarian crisis in Ukraine further exacerbated risks to the global economy, including higher commodity prices and disrupted supply chains. in advance. NOT FDIC INSURED | OFFER NO BANK GUARANTEE | MAY LOSE VALUE | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT A DEPOSIT. Closed-end fundraising declined 23 percent year over year. In China, state-owned enterprises make up approximately 40% of GDP.12 These companies have traditionally been less nimble and commercially focused than their private counterparts, with many straightforward areas for operational improvement. After more than doubling year over year in 2021, multifamily deal volume fell 29 percent in 2022, accounting for nearly half of the asset classs overall decline in deal activity. On the supply side, the closing of a record number of global megafunds boosted fundraising. The flow of capital into the asset class has pushed investors to look beyond traditional core infrastructure assets (Exhibit 10). document.write(new Date().getFullYear()); MorganStanley.Alle Rechte vorbehalten. Since these charges and expenses are different depending on a contract and other factors, MSIMJ cannot present the rates, upper limits, etc. Globally, fundraising fell 15 percent from the all-time high achieved in 2021 (Exhibit 3). Bain's Global Private Equity Report examines the industrys strengths, its challenges, and the evolutionary path that lies ahead. Considerations for diversity, equity, and inclusion (DEI) have become an important part of the fundraising, hiring, and investing landscape in private markets. In total, 2,543 funds held a final close, a 14% increase on the previous years tally. Going into 2022, all regions are clearly at different stages of digital technology adoption. Deal volume fell 20 percent, declining in each consecutive quarter throughout the year (Exhibit 5). By contrast, Asia-Pacific (APAC) respondents maintain the most cautious view. It has been a positive year for ESG with a broad recognition of ESGs importance from all stakeholders and acknowledgement of its role in value creation. For more from Dry Powder on the report, you can listen to Three Essential Trends. Datenschutz The 2022 Preqin Global Alternatives Reports are the most complete and in-depth annual reviews of private equity, venture capital, private . current macroeconomic and geopolitical events are creating short-term pressure on high-growth sectors such as telecommunications and renewables. content Changes is slowest in the Middle East and Africa where 18% of investors have yet to embark on digital revolution at all. TECH AS A LEAPFROG OPPORTUNITY 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT - SAMPLE PAGES CONTENTS CEO's Foreword - Mark O'Hare 4 1: 2017 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT Keynote Address - Joseph Bae, KKR 6 Keynote Address - Capturing Megatrends Growth through Minority Stakes - Stanislas Cuny, Amundi 8 2: OVERVIEW OF THE PRIVATE EQUITY . [2] Private equity managers expect another boom year in 2022. Note that the data discussed here is limited to only what is reported to Preqin; as a result, the dataset may suffer from survivorship bias. Accordingly, save where an exemption is available under the relevant law, this material shall not be issued, circulated, distributed, directed at, or made available to, the public in Hong Kong. 2022 will prove to be the best year yet for ESG-focused fundraising, with $24 billion raised through the first half of the year. On the surface, historical private equity (PE) performance in Asia has been shown to be on par with performance numbers generated in other regions. Going into 2022, PE investors remain largely bullish on the investment activity outlook. No investment should be made without proper consideration of the risks and advice from your tax, accounting, legal or other advisors as you deem appropriate. Core-plus and value-add strategies are now investing in new asset categories and infrastructure service providers as GPs seek to accommodate the return expectations of a new class of infrastructure investor. Notably, 40% of respondents from North America and 26% from Europe claim that they dont face any major challenges, while only 11% of LatAm investors and 13% of Middle East investors feel the same. Private debt fundraising continued to grow last year (+2 percent), once again bucking the trend of other private asset classes. Outside the US and EU, Eaton Vance materials are issued by Eaton Vance Management (International) Limited ("EVMI") 125 Old Broad Street, London, EC2N 1AR, UK, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority. (As of 7/10/2021). Labor shortages in the wake of the pandemic are undoubtedly playing a role in the overall picture. There are also pockets where capital supply/demand dynamics remain reasonable, resulting in attractive entry valuationse.g., in Thailand, there is a paucity of PE managers facilitating investment opportunities in high quality, growing companies. A United Nations-supported network of investors promoting sustainable investment. This article is a summary of a larger report, available as a PDF, that is a collaborative effort by Pontus Averstad, Alejandro Beltrn, Marcel Brinkman, Paul Maia, Gary Pinshaw, David Quigley, Aditya Sanghvi, John Spivey, and Brian Vickery, representing views from McKinseys Private Equity & Principal Investors Practice. Note: Credit Card Penetration as defined by percentage of people age 15+ who use credit cards Source: Statista, data as of June 2022, Source: PPRO Asia Pacific, Western and Central Europe, North America Payments and e-commerce report 2022. Since 2017, fundraising in Asia has declined 16 percent per year, driven primarily by reduced investment in China. Deal volumes declined 27 percent as financing became more expensive and harder to access. Indeed, real estate performance has exceeded inflation in six of the last seven inflationary periods, in part due to cap rate compression even during a rising interest rate environment. Capital deployments into larger vehicles increased as investors re-upped with existing managers while forgoing commitments to smaller and newer managers. Get the long story short in the latest episode of our Dry Powder podcast. But ESGs growing impact on private markets goes beyond just dedicated funds and deals: most funds (of any strategy) now consider ESG risk factors in due diligence, and some explicitly include ESG concepts in their value creation plans. Alternative investments typically have higher fees and expenses than other investment vehicles, and such fees and expenses will lower returns achieved by investors. Financial services (2.5 times) and information technology (2.2 times) recorded the largest multiple declines among PE subsectors, while rising commodity prices drove multiple expansion in raw materials and resources (+2.6 times). France-based fund managers are leaders in ESG investingLONDON, April 27, 2023 (GLOBE NEWSWIRE) -- Preqin, the global leader in alternative assets data, tools, and insights, published its Private . New platforms comprised 28 percent of total transactions in 2022, 14 percentage points lower than five years ago. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. 13 Russell Reynolds, Transitioning to the Next Generation: Leadership succession within family businesses in Southeast Asia, November 2021. In 2022, mezzanine strategies were most in favor, posting record fundraising totals and more than tripling 2021s haul. No representation or warranty is made as to future performance or such forward-looking statements. 'Private Capital' will refer to the broader spectrum of private closed-end funds, including private equity, private debt, private real estate, infrastructure and natural resources. 2 Preqin, data as of September 2022. 43% were Private Equity Firms, 29% were Venture Capital firms and 28% were firms doing both Private Equity and Venture Capital investments. As in 2020, when private debt was the only private asset class that recorded fundraising growth, investors ability to allocate to one or another strategy based on the prevailing market environment has contributed to consistent top-line growth through business cycles (Exhibit 7). Healthcare follows IT as the second top industry, up to 47% from 43% in 2021, attracting more investors as the sectorcontinues to offer opportunities, especially in the Healthcare Technology industry. [11]Another active year is anticipated[12]as sponsors continue to take advantage of favorable exit conditions and new dynamics such as the rise of Special Purpose Acquisition Companies (SPACs). Beyond robust GDP growth, under-penetration in many sectors creates opportunity for accelerated growth. In almost every regard, 2021 was an exceptional year (as we highlightedin last years report) but it was not a trend breaker. Paired with lower valuations public market valuations trading as much as 40-50% lower than the US on a P/E basis,8 and private markets valuations that have almost halved from their peak9 there should be a particularly attractive opportunity at hand. Bookmark content that interests you and it will be saved here for you to read or share later. 2021 PREQIN GLOBAL PRIVATE EQUITY & VENTURE CAPITAL REPORT - SAMPLE PAGES 1. Report is also available in Chinese, Japanese and Korean upon download. The Netherlands: MSIM FMIL (Amsterdam Branch), Rembrandt Tower, 11th Floor Amstelplein 1 1096HA, Netherlands. In office, for example, net absorption turned positive as attendance rates seemingly reached a new equilibrium. Registered Office: Beethovenstrasse 33, 8002 Zurich, Switzerland. /pub/content/dam/im/json/imwebdata/im/data/misc/translation/translation.json, /pub/content/dam/im/json/imwebdata/im/data/misc/translation/aggTranslation.json. 3 Preqin, data as of July 2022. Concerns about the availability of skills and talent as a threat to the growth of portfolio companies have doubled from last year, climbing to 36% from only 17% in 2021. Eine umfassende Bewertung wichtiger Trends, die das globale Anlagerisikoumfeld und unsere Portfolioallokationen beeinflussen. On some diversity metrics, private markets firms compare favorably with corporate America, although ethnic diversity is not yet broad based. 2 Preqin, data as of September 2022. Die auf dieser Website beschriebenen Dienstleistungen sind unter Umstnden nicht in allen Rechtsgebieten oder fr alle Kunden verfgbar. Going forward, shifting macroeconomic conditions will make efficiency initiatives an increasingly important value driver in Asian private equity. [11] S&P Capital IQ Pro Platform (as of 25/01/2022). The prevailing market uncertainty also served as a shot in the arm for private credit deployment opportunities. By navigating unique cultural and geopolitical situations, arbitrage opportunities, and positioning companies well for exit, sophisticated GPs can capitalize on the inefficiencies of this market dynamic to buy low, sell high., Professionalization and Efficiency Improvement An Additional Source of Alpha. Increasing representation across all levels will require managers to take fresh approaches to hiring, retention, and promotion. Private equity surged ahead with soaring deal and exit values. These disruptions had substantial and varied impacts on private markets fundraising, performance, and AUM growth, with steep declines in certain regions and strategies, and pockets of resilience in others. Retrieved from: https://www.ftadviser.com/investments/2021/10/07/investing-in-the-next-generation-of-healthcare-opportunities/, [6] M&A Year in Review 2021. Source: S&P Global Market Intelligence. Overall, 41% of respondents say that their firms are in the early implementation stage, mainly focusing on using Customer Relationship Management (CRM) and digital platforms for reporting. Across the entire investment life cycle, from fundraising and asset selection to value creation and exit planning, ESG is on the minds of investors (Exhibit 11). As the industry narrative turned from beta to alpha, there was less alpha to be had in 2022. The continued momentum in 2022 was understandable, as debts current yield and senior position in the capital stack have long made it a haven in volatile periods. Andrew Slimmon, Lead Portfolio Manager der Fonds und Strategien des Applied Equity Advisors Teams, teilt seine Einschtzung der Finanzmrkte. Spain: MSIM FMIL (Madrid Branch), Calle Serrano 55, 28006, Madrid, Spain. MSIM announced today that it has held the final close of Ashbridge Transformational Secondaries Fund II (Ashbridge II) at $2.5 billion of total capital commitments. The market environment in the next few years will present further dislocation and opportunity for fundamental value creation. LPs want more transparency, data points around . We asked the CEO of Moonfare what it takes to get ordinary investors up to speed and investing in private equity with confidence. The deal-making momentum of 2021 continued through the first half of 2022, and despite the striking slowdown in second-half deal activity, 2022 remained the second most active year on record. In the EU, MSIM and Eaton Vance materials are issued by MSIM Fund Management (Ireland) Limited (FMIL). The largest five managers accounted for 29 percent of all fundraising, the highest share of the last decade, and tenants favored class A real estate as they fought to attract and retain employees. Federal and state tax laws are complex and constantly changing. SPACs are playing a new role in the market dynamics, particularly in the U.S. Trial by fire: Indian PE ecosystem resilient in a globally challenging year. [12] Robust private equity exits may set record year. 2022 will prove to be the best year yet for ESG-focused fundraising, with $24 billion raised through the first half of the year. Review sample excerpts of data and insights from our 2022 Global Alternatives Reports when you download the free Alternatives in 2022 report today.. The five-year horizon internal rate of return (IRR) of 19.2% trails global private equity (20.8%), but the one-year return of 24.8% is some way above the 14.4% for private equity globally. Eine zeitgerechte Analyse markt-verndernder Ereignisse und deren Wirkung auf das Anlageumfeld. Too many business leaders lack a clear understanding of profitability, but a few organizations are visualizing profits in startling detail. Principles for Responsible Investment, annual report, 2022. AUM grew as well, reaching a new high of $1.3 trillion, 14.2 percent higher than in 2021. While Asian private equity can be a difficult segment to diligence and access, MSIM believes that its 20+ year history investing in private equity funds and opportunistic investments in Asia, combined with the broader resources of Morgan Stanley, can help bridge this knowledge gap.1 MSIMs upcoming series on Why Invest in Asia Private Equity? will look to demystify the opportunity, starting out with The Case for Outperformance, which explores some of the drivers of outperformance including accelerated growth/leapfrog potential, valuation arbitrage, and the opportunity for company-level professionalization and efficiency improvement.