Developments from IPEM: Building Trust and Self-assurance
The private equity sector is showing its ability to adapt, react, and lead, as evidenced by the recent International Private Equity Market (IPEM) held in Paris this month. With over 5,500 participants from 55 countries in attendance, the event was a testament to the global interest in this dynamic industry.
The theme of this year's IPEM was 'Forging Confidence', and it was clear that the sector is brimming with optimism, despite the challenges posed by economic instability and ongoing geopolitical tensions. Grégoire Langhade, the Managing Director of Financial Sponsor Coverage, was among the 320 speakers who shared their insights through a mix of formal presentations and bilateral discussions.
One of the key trends emerging from the event was the growing preference among Limited Partners (LPs) for sector specialists over generalist approaches. This specialisation is opening new avenues for investment, particularly in areas such as AI, digitisation, and decarbonisation, which are expected to drive the next wave of innovation.
The pace of technological transformation is increasing demand for digital infrastructure such as data centres and fibre optic networks. This shift has altered the scope for investment in private markets, with private equity firms now playing a crucial role in funding and developing these critical assets.
Despite potentially lower returns, the outlook for the private equity sector remains positive. Large businesses are increasingly going private or staying private for longer due to the strength of private governance models. In a high-interest rate market, understanding and acting on opportunities presented by AI, digitisation, and decarbonisation will offer the most direct path to growth.
New strategies, including a normalisation of private debt and a greater focus on specialisation, are set to spur investments as exits become more visible. Private debt is being used more frequently for midcap deals and as a way for companies to build familiarity with private equity reports.
Economic instability has shifted investor priorities from returns to resilience. As a result, private capital has remained resilient and growth has continued across asset classes. The breadth and pace of technological transformation have made it essential for investors to balance qualitative and quantitative factors and leverage their expertise to determine the areas that are best positioned for transformation.
Coming away from a lively and well-attended IPEM, it is clear that there will not be a shortage of opportunities in the year ahead. The sector is gearing up for a new era of re-globalisation and re-shoring, opening up exciting prospects for both established players and new entrants. The private equity sector is poised to play a pivotal role in driving this transformation, forging the path towards a more innovative, sustainable, and resilient global economy.
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