Private Equity Perspectives December 2022| Mickael Tabart, KPMG Luxembourg
Mickael Tabart
Audit Partner at KPMG Luxembourg – Private equity and Assurance Leader
Table of contents
Introduction: Events and What’s next for private equity?
Top Articles For You
Private Equity and ESG
Technology Insights
What can we expect over the coming quarter?
Dear Clients, Colleagues, and Friends of KPMG,
Before everyone can hopefully welcome a peaceful, and enjoyable break with friends and family, this second edition of the KPMG Luxembourg Private Equity Perspective is packed with quarterly reports and industry-specific insights to usher us through the last month of the year.
This article aims to collect the most relevant information, data and trend reports in the industry from KPMG globally. In addition to this PE focused article, we are also issuing our Luxembourg AI newsletter that I would encourage you to subscribe to, so that you are able to get the most out of our Luxembourg alternatives topics.
?As you may all have been aware, the last three months were packed with several events as we enjoyed a post COVID environment, where we could experience the importance of in person meetings and networking once again.
It started out with two events in Luxembourg, the first being the LPEA insight conference , which focused on Fundraising and how Luxembourg is shaping its way into the European hub for Investor Relations. The second event was the ALFI Private Asset , a two day conference with many insights from our colleagues on the Luxembourg AIFM eco system, including the CSSF, who spoke on the key initiatives for 2023, such as: Sustainability and ESG,whereby the CSSF is already conducting inspections to familiarize itself with the current market practices in Luxembourg; AML and KYC,cross border distribution;and valuation (which is not a surprise in the current economic situation). It was also anopportunity to present the results of our Private debt survey in Luxembourg.
In addition to the above, KPMG Luxembourg also hosted a series of events top resent the outcome of our two highly anticipated surveys focusing on the Luxembourg alternative ecosystem. The fourth edition Alternative Investments Substance Survey , where we break down how GPs’ substance trends have evolved over the past twelve months, gives a deeper insight into the differences between pre-pandemic and post-pandemic Luxembourg. Here we look at key functions like sophistication and consolidation. ?The second edition of the KPMG Large-Scale ManCo Survey , takes a closer look into the driving forces and keys trategic priorities of the largest Management Companies in Luxembourg and ?paints a clear picture of how ManCos navigate the challenge to implement lean operating models.
In addition to these events, we also took the opportunity to host internal events with our Private Equity audit team to highlight the main driving forces for 2023, and the importance of a client centric mindset. We also had the opportunity to welcome some of the representatives from Waystone to our offices, to illustrate what was carried out in their day-to-day operations.
Finally, we had the pleasure of welcoming 30 students in Advanced Master in Financial Markets from the famous Solvay Brussels School of Economics & Management ?during their trip in Luxembourg. ?The afternoon was spent discussing the KPMG value proposition for their career development. In addition to that, we also discussed the Luxembourg PE market landscape,with key note speakers from Neuberger Berman, EIF, Apex group, LPEA and?Foodtech Food4all.
What’s next for private equity? Value creation becomes a top private equity priority (kpmg.us)
On an International level, Value creation continues to be a top priority to our clients, especially as the deal market slows down and the focus is on extracting value from current portfolio companies.
Carole Streicher, Deal and Strategy leader, KPMG U.S., and Americas Regional Head of Deal Advisory?and Glenn?Mincey, Global and U.S. Head of Private Equity recently spoke to Private Equity International magazine for their special anniversary issue that looks at how private equity has changed over the past 21 years and what may lie ahead.
They shared our thoughts about the importance of value creation as well as the role data analytics, ESG, and take-privates will have as investors seek to enhance EBITDA and create value. We note that in the current economic environment, and with fewer platform deals on the horizon, firms must shift their energy to look at opportunities to deliver more EBITDA improvements thoughtfully and quickly within their existing portfolios.
I hope you find the article educational and thought provoking. Please contact me if you would like to discuss further or learn how KPMG can help your organization navigate its objectives and challenges going forward.
Mickael
Top Articles for you
This cross-industry report takes an industry?by?industry look at how companies can gain an advantage in a downturn by learning lessons from past recessions.
Regulators are relentlessly pursuing what they perceive to be “weak links” within risk programs and coverage. In parallel, they are continuing to execute against their broad and ambitious 2023 agendas, even with heightened discord in public policy and increasing judicial challenges to regulatory authority.
Today's PE landscape stands in contrast to 2021’s anomalous levels of activity—an oncoming global economic downturn, rising interest rates and geopolitical tensions have resulted in a slowdown in deal activity, yet fundraising and buyouts remain above pre-pandemic levels. This report from Mergermarket in association with Dechert includes insights from a survey of 100 senior PE executives in Asia, Europe and the U.S. on how they continue to show resilience in the face of a variety of macroeconomic and geopolitical issues.
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Financial buyers have been taking more time to perform due diligence and, in some cases, have been negotiating stronger indemnity provisions to protect themselves against downside risks facing the assets they are looking to buy. As the deals market cools amid sinking valuations and rising borrowing costs, sellers may see a smaller pool of suitors, making it easier for buyers to dig into a target's financial standing and negotiate better legal terms.
The possibility of a U.S. recession raises the probability of rising defaults in credit markets. The stress in this cycle is driven by unforgiving high interest rates as opposed to previous cycles triggered by a specific sector-related shock. Despite growing headwinds for the economy, however, Guggenheim remains encouraged by the financial results they see across a large portion of the credit market. Debt issuers are heading into this slowdown in good financial shape, with strong balance sheets and historically high earnings. Given solid credit fundamentals, they view yields and discounted bond prices as offering the most attractive opportunity to portfolios in over a decade, but investors must be aware of downside risks that remain while the economy absorbs the full extent of policy tightening.
Private Equity and ESG
KPMG’s International Standards Group (ISG) launched a Sustainability Reporting Resource Centre . This tracks the latest thinking of the ISSB as well as providing practical guidance and our latest insights – to help companies get ready for the new IFRS? Sustainability Disclosure Standards.
In this publication, KPMG's EMA Financial Services Regulatory Insight Centre, providing key updates on the latest ESG regulatory developments impacting financial services firms in the UK and the EU.
An unprecedented effort by private equity firms offers data-driven insights into the progress private companies are making against their ESG goals.
Technology Insights
KPMG reports on the state of digital transformation, automation, artificial intelligence, and machine learning for the following industries:Consumer and retail , Technology, media, and telecommunications , Energy and chemicals , Financial services , Government and public sector
A KPMG survey of directors and executives finds that a majority believe that the CISO’s relationship with the board is characterized by high trust and consultation, but nearly a third say the board doesn’t see the CISO as a key executive.
What can we expect over the coming quarter?
Q3 Sector Deal Analysis
Dive into the latest set of M&A trends by sector that Deal Advisory and Strategy recently released and share our point-of-view with clients and targets as they continue to navigate a restrained deal environment.
Managing Director Accounting & Advisory Services - ESG Reporting | Capital Markets | IPO and SPAC transactions | Buy and Sell Side Accounting Support | IFRS | US GAAP | Dutch GAAP | Industrial Markets | Consumer & Retail
1 年Happy holidays!
Founder id Linked, ILA Certified Director, Chartered Director (Institute of Directors, London), DiplD, Independent Non Executive Director (Unabh?ngiges Verwaltungsratsmitglied)
1 年Thanks for this article Mickael Tabart very useful