This year 2020 edition of IPEM will bring together 2,900 management companies, private equity and advisory players. The summit is intended to bring together financial professionals and investors to discuss trends and strategical approaches.
The program will start with a day around themes of identifying growth levers for growth by 2020. Will be under scope : the “growth hacking” recipes methods of some funds, inclusive and sustainable growth models.
ESG standards have become a major consideration in the investment policies of most asset managers, and will be widely discussed at the conference. The growing demand of institutional investors for ESG securities justifies the importance they have taken as an effective value-creating tool in their wallets.
The second day will be devoted to European Private Capital sector and will address issues around the economic context, Europe’s regulatory and policy in 2020.
As private markets gain ground, the third day will be intended to bring together private capital players and especially LPs in order to update asset classes, their attractiveness, emerging practices and innovations.
IPEM 2020 conducted a European survey of 370 investment professionals. The European private equity industry remains very optimistic about the emergence of new opportunities in 2020. In an economic environment where investors are less concerned about the future, and an industry that is much more optimistic than in 2019, the study overall indicates that:
LPs will continue to raise funds (72% vs. 65%) and to conclude agreements (71% vs. 65%): an upward trend in 2019
They are less afraid of a global recession: 4 out of 10 people fear a major economic correction in 2020 (vs. 55% in 2019)
Brexit and its consequences are less mentioned as an external threat compared to 2019 (71% vs. 80%)
A dynamic fundraising project is expected in 2020, globally 66% of respondents believe that The Family Office and HNW will represent the largest funds to come, followed in descending order by the pension funds, wealth managers and insurance companies.
60% plan to raise new funds 2020
The number of GPs will change in Europe (59% vs. 54% in 2019)
But tensions persist and access to opportunities for growth will always be difficult:
Deployment is considered difficult
Only 17% mention that it will be easier to find attractive investment opportunities in 2020
30% believe that transactions will have less leverage than in 2019
Few GPs invest in America, Asia and emerging markets
Technological transformation is by far the most cited concept as having a positive contribution to the industry by both funds under $100 million and venture capital.
Similarly cybersecurity is particularly cited this year than last year in the list of attractiveness points for venture capital funds.
High valuations are the main industrial and economic risk named by 9 out of 10 industry professionals. So 86% of them share their fear of a significant increase in 2020. In a logic way comes at the second place the growth slowdown, real challenge for investors looking for high returns in a current low rate environment.
Behind this pan-European survey of IPEM 2020, we can see the underlying social responsibility of PE going far beyond their field of pure finance.
They are now aware and involved in their social and environmental impact on job creation, egalitarian standards, technological development and less environmental risks.
“Despite the palpable caution of private equity professionals towards the European economy, this barometer underlines the industry’s excellent mood at the beginning of 2020,” notes Antoine Colson, IPEM’s Managing Director. “While the current environment, characterized by high valuations, is expected to continue or even increase, European management companies are showing great confidence in their model and in their asset class. The expected increase in cross-border transactions also confirms that private equity has become a European-wide industry. Another important lesson is the emergence of a truly European model, which places contribution to society and its various ESG components at the very top of its agenda.”
Article Joana Foglia