Insights from this week’s SuperReturn International Conference

I thoroughly enjoyed chairing the SuperReturn International Conference – one of the pre-eminent events in the private equity calendar.?

It was an honour to share the stage in Berlin with some of the legends of the private equity industry, including David Rubenstein, Co-Founder of The Carlyle Group, and Jean Hynes, Chief Executive Officer of Wellington Management. We were also joined by some exciting new entrants such as Kim Kardashian and Jay Sammons, Co-Founders and Managing Partners of SKKY Partners.?

Here are my key takeaways:

The era of cheap money is over

This point was made repeatedly by speakers, who also emphasised that rising interest rates are among the many headwinds facing private equity today. Like other sectors, we must contend with sluggish economic growth, ongoing supply chain disruption and geopolitical instability. All these factors present substantial challenges to private equity firms that are looking to raise money, manage risk and deploy their capital effectively.

Value investing is back!

Fortunately, where there is challenge, there is also opportunity – a cause for restrained optimism. As interest rates climb, PE firms are generating value through ‘back to basics’ investing (buying the right companies and owning them well). They are also taking advantage of rapid growth rates in emerging markets and striking deals in dynamic sectors, such as sport and technology. This is further proof that the great advantage of the PE model is its ability to flex with the environment. Another important trend is the shift towards consolidation within the PE industry. It’s a case of ‘watch this space’ since more deals are predicted.?

Technology is supercharging private equity

A major theme of virtually every session was the transformational impact of technology on private equity. This point was underlined by many speakers, including Greg Mondre, Co-CEO of Silver Lake. Next-generation technologies are set to create substantial value for private equity, and more importantly, society as a whole. AI, in particular, is an area of huge activity for PE firms. They're looking at AI at fund level, and deal level, and they're driving it through their portfolios. Some funds are even setting up their own dedicated ChatGPT investment committees. Firms are also deploying AI tools within their own businesses. Gabriel Caillaux, Co-President, Managing Director and Head of EMEA at General Atlantic, revealed that his firm had asked an internal bot to assess past and potential deals and predict how they might perform.

An evolution is underway…

Private equity is evolving due to several key trends. We are currently seeing a strong focus on take-privates, with these kinds of deals constituting more than 60% of PE activity by value this year. There is also a global trend towards large carve-outs as PE firms look to leverage their scale and operational expertise to drive value where others can’t. Additionally, we’re seeing the rise of retail investors.?Overall, the conference reconfirmed our view on private credit – which is that private credit funds are collaborating to a degree we have not seen before. Also, the actions they’ve taken over the past 12 months will lead to a permanent shift in their market share, even as financing conditions normalise.?

?Another year, another great conference, and another great opportunity to spend quality time with my colleagues and clients in the private equity industry.?You did it again, SuperReturn!

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David Rubenstein,? 凯雷投资集团 , Jean Hynes , Wellington Management , Jennifer Prosek , Kim Kardashian, SKKY Partners , Jay Sammons ,? SuperReturn ?#privateequity #valuecreation

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