septembre 2023 | PRATIQUE

MJ&Cie was at the September Paris IPEM, one of the most international editions !

It served as the final major Private Equity event of a challenging year, characterized by increasing interest rates and a slowdown in growth.

It is noteworthy that fundraising is gaining momentum and the selection of managers remains a crucial factor for success, as the dispersion will become more apparent.

In this context, managers should prioritize their expertise in order to drive higher growth and generate operational alpha in their portfolio companies, rather than relying heavily on the assistance of cheap leverage or multiple expansion.

Similar to the previous edition, secondaries continue to be the highlight of the event, with more sophisticated and data-driven strategies being employed to both general partners (GPs) and limited partners (LPs) transactions. However, it is important to note that the popularity of GP-led strategies may result in misleading key performance indicators (KPIs), particularly for distribution to paid-in capital (DPI).

The market’s openness to retail investors has placed additional pressure on GPs, who now face stricter regulations and reporting requirements, particularly in light of the new rules set by the Securities and Exchange Commission (SEC).

Consequently, the rising costs associated with managing an investment fund structure will likely lead to market consolidation, resulting in fewer small and emerging managers. This may not necessarily be positive news for investors, as small and emerging managers tend to be the top performers.