Interview with Jean-Baptiste Brian - Managing Partner & Co-CEO - Hg

Jean-Baptiste Brian believes that private equity is not undergoing a sudden shift, but rather the acceleration of a trend that is already underway: the end of the purely opportunistic “deal-making” model and the rise of specialized players capable of gaining a deep understanding of their sectors and providing operational support to companies.In his view, rising interest rates have put an end to a historic driver of performance: the expansion of multiples linked to the decline in the cost of capital. Future returns will therefore need to come more from the actual transformation of companies: improvements in products, processes, management, customer relations, and scaling. He anticipates a polarization of the market between large multi-asset platforms, capable of operating on a global scale, and high-value-added sector specialists. Intermediary players, lacking critical mass or differentiating expertise, will be the most exposed. Geographically, he remains convinced of the United States’ potential, despite political turbulence, due to its superior structural growth. Europe remains strategic, while Asia could become a new frontier for Hg. Jean-Baptiste Brian also emphasizes the central role of AI and data. AI is already transforming investment methods and value creation, but it is also reshuffling the deck when it comes to the value of data: aggregated public data is losing its value, while proprietary, unique, and actionable data is becoming even more strategic.Finally, he sees less of a massive consolidation among private equity funds and more of a natural selection by LPs, who will favor managers capable of making sustainable investments in their teams, infrastructure, and value creation capabilities.