The Spotlight - Edition 6 - February 2024

In recent weeks, we have been taking full advantage of our visit to the Middle East by meeting with investors and professionals covering local and global markets. Regional opportunities continue to emerge on the back of the growing economy, especially in Saudi Arabia with its Vision 2030.

On a global level, the start of 2024 has been a busy time for the private markets sector, with several fund closes from flagship names such as TPG and KKR.?

We have also observed a growing interest from Wealth Managers in global private markets, a space that has been largely dominated by institutional investors. Therefore, this month's article is dedicated to Wealth Managers, it expands on how they can benefit from private markets' superior returns and offer access to their clients.

Check it out below and have a great read!

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Why Wealth Managers Need to Expand Access to Private Market Funds

With the ongoing intergenerational wealth transfer and hunger for greater returns in a high-inflation environment, investors are finding the limitations of traditional asset classes unable to satisfy their desire for higher portfolio returns. This has prompted more investors to focus on alternative investments, particularly private market funds. Indeed private markets AUM have risen by 130% to $22.6T over the past decade.

Despite that, wealth managers are still allocating only a relatively small proportion (approx. 10-15%) of their portfolios to private markets. It’s imperative to expand their investments range and enable access to private markets, while overcoming any perceived barriers.

In this month’s article, we show how by leveraging technology and embracing innovative investment avenues, wealth managers can sustainably deliver the value their clients expect.

Read Full Article?→

Market Updates

• TPG Partners IX and TPG Healthcare Partners II have together secured $15.6bn for their private equity and second healthcare funds.

• KKR has closed its Asia Pacific Infrastructure Investors II Fund, raising $6.4bn. It’s the largest raise for an infrastructure fund focused on the Asia Pacific area and highlights the group’s conviction and commitment to the sector and region.

• Brookfield, at its first close, has secured $10bn for its second Global Transition Fund. The final close is expected in Q3 of this year. The fund will target investments in clean energy, decarbonization and sustainability.

• Carlyle?is launching?a private credit fund for wealthy individuals. It is in line with the group’s strategy to build its wealth division, provide investors greater access to private markets, and enable enhanced yields across market cycles.

• Blackstone has raised an extra $1bn for its latest European real estate fund, taking total commitments to $5.1bn. It also targets $10 billion for an opportunistic credit fund.

• TPG announced an AUM of $222bn as of 31 December 2023, up 64% YoY. The acquisition of Angelo Gordon, finalized last November, helped by adding $75bn, whilst expanding its presence in Europe and Asia.

Market Trends

• KKR has that stated private wealth will have a meaningful impact on its balance sheet post-2026. It also sees a sharp rise in private wealth platforms this year, thus offering fund managers a major opportunity to access additional funds.

• As more firms look to private markets to diversify, there is an expectation of?greater investment from the larger players. In the KKR family offices survey many CIOs expressed intent to increase exposure to alternatives in 2024. Less liquidity is a good price to pay for expected higher, tax-efficient return.

• The secondaries market was also discussed in depth at the IPEM Cannes conference. While still undercapitalized, significant committed funds are now starting to be called as more deals gain traction.

• GP-led secondaries are also becoming more popular – many have transformed from deals that no one wanted a decade ago, even at big discounts, to now top investments with even more upside available.

This Month's Events

Saudi Capital Market Forum

At the Capital Markets Authority Event, we noted the progress that Saudi Arabia is making towards its 2030 goals, with several targets already exceeded.

It is also evident that the local capital market is playing a huge role in enabling such growth with a record number of IPOs expected in 2024 and the ambition it has for its debt capital markets.

UK-Saudi Fintech Venture day at The Garage

Mnaara was invited by the Saudi British Joint Business Council to attend the UK-Saudi Fintech Venture Day at The Garage in Riyadh. The council aims to foster business relations between Saudi Arabia and the UK. The event showcased the fruitful collaboration that investors, startups, and regulators are having across both regions.

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