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Deciphering trends

The impact of the economic context

Published on
23/1/2025
3:04mn

Summary

Sector selection and diversification to boost performance in private equity.

Written transcription

Damien Hélène: Let's dive into the dynamics of the global macro-economic environment and its impact on private equity investment opportunities. For this session, I'm joined by Louis, our Chief Investment Officer, who will share his analysis throughout our discussion. Hello Louis, thank you for joining us. What's your take on the current macro environment and its impact on private equity?

Louis Flamand: Everyone can see that the European economy is falling behind the US economy. German industry is struggling, not least because it no longer benefits from the cheap energy sources it used to enjoy. France, meanwhile, is going through a political crisis, and its debt levels are a cause for concern. Private equity is obviously impacted by the macro-economy. But the most important point is that this impact is limited. Private equity is first and foremost a story of micro-economics. Managers know how to find champions in high-growth sectors, even in a complicated macroeconomic environment. The macro environment in Europe has been difficult for a long time, yet the performance of European private equity is good, and approaching that of North American private equity. What's more, Altaroc offers strong global geographic diversification, so that the potential impact of difficult macro-economic environments in certain regions of the world on the final performance of our Vintage investments is further reduced.

Damien Hélène: Some private customers are wondering about the macro-economic situation in France. What is our exposure to France?

Louis Flamand: We invest in France, but our target exposure is low. And secondly, our French portfolio companies are mostly international in scope. For example, Altaroc Odyssey 2024 has a target exposure to France of only around 4% of its target commitment to funds, mainly via the Bridgepoint Development Capital V fund. In addition, Bridgepoint aims to internationalize its portfolio companies, and will therefore create significant value by growingOdyssey 2024's French companies internationally.

Damien Hélène: By the way, Louis, speaking of Bridgepoint, I'd like to take you straight to Xavier Robert's analysis. He is Chief Investment Officer at Bridgepoint. He's been with the British firm for 26 years. He is one of the leading figures in private equity. He has been in the industry for over 30 years, and opened the doors of his London office to us a few days ago.

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