The 2023 IPEM Cannes conference was a proper Reality Check for the 3000 delegates.
Rising rates and inflation, along with a slowdown in growth and a challenging exit environment were the main concerns for participants, even though deal-making and capital deployment should prove significant throughout 2023. Whereas some are pricing in valuation drops, others point to a coming change in dealflow. This year is likely to be volatile, and will create opportunities for those with agility and flexibility.
Fundraising may continue following a strong 2022, the main trend for this year being a shift from a traditional institutional LP base to smaller and newer segments, driven by the rise of interest from family offices and retail investors. Diversification will be important as ever for portfolio resilience. Financing, access to credit and capital flows are much in focus from a risk management perspective.
2023 should be a year where mid-market players anticipate the most opportunities, with operational efficiency and organic growth as key drivers to create value.
In the words of Antoine Colson, « There’s a sense that PE is coming back to its original playbook – and that’s something the small and midcap segment looks better positioned to realise ».
As to firms’ strategies, ESG, HR & Talent management will be critical focus points for the year ahead. Communication, Marketing and Reporting are just next, especially at a time of accelerating private markets democratization.
When it comes to industry-wide priorities, action on climate change is the #1 LT challenge. In the ST, firms are most focused on navigating the current economic environment.
Overall, there was a positive feeling for European Private Capital in Cannes, with attendees enthusiastic about an exciting year ahead, and looking forward to meeting again in Paris in September!