{"id":124374,"date":"2024-07-24T13:20:27","date_gmt":"2024-07-24T11:20:27","guid":{"rendered":"https:\/\/llyc.global\/?p=124374"},"modified":"2024-07-24T13:42:01","modified_gmt":"2024-07-24T11:42:01","slug":"the-global-outlook-for-pe-from-the-u-s","status":"publish","type":"post","link":"https:\/\/llyc.global\/en\/corporate-affairs\/tendencias\/the-global-outlook-for-pe-from-the-u-s\/","title":{"rendered":"The Global Outlook for PE (from the U.S.)"},"content":{"rendered":"

There is no question that the U.S. private equity sector plays an outsized role in the U.S. economy<\/strong>, and even in a relatively quiet period is still robust compared to any other region of the world. While the global PE market seems to be slowly catching up, both as a pipeline for new deals and as a source for new investors, what do PE players themselves think about the future of PE globally<\/strong>? And how are they navigating today\u2019s headwinds \u2013 namely the regulatory environment and interest rates \u2013 to find investment opportunities across continents?<\/p>\n

That was the question news organization Axios explored during a recent event, Axios’ The Next Era: Private Equity’s Global Path NYC<\/a>. Axios PE reporter Dan Primack<\/strong> interviewed several PE executives for their perspectives, including Weil, Gotshal & Manges LLP Co-Head, U.S. Private Equity Christopher Machera<\/strong>, and Partner, Private Equity Robert Rizzo<\/strong>; Hamilton Lane Co-CEO Erik Hirsch<\/strong>; and EQT Group’s Head of Private Equity North America and Global Co-Head of Healthcare Eric Liu<\/strong>.<\/p>\n

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Cross-Border PE<\/strong><\/p>\n

Machera and Rizzo noted that cross-border deals have been accelerating and that pent-up demand makes the market primed for an uptick<\/strong>. They said, \u201cAsset management M&A is a huge trend. There’s been a huge shift of capital coming this way from the European sponsors – we’re seeing a lot of sponsors look to the U.S. when it comes to private equity and other acquirers.”<\/p>\n

They argue that increased regulatory scrutiny<\/strong> \u2013 including some anti-dealmaking sentiment \u2013 should not scare dealmakers away. \u201cWe\u2019re dealing with the same issues on both sides of the Atlantic. We\u2019re dealing with hostility like we\u2019ve never seen before when it comes to dealmaking. But the important thing to note is that \u2026both in the U.S. and Europe \u2026 private equity is looking to enhance the competitive nature of markets<\/strong>, and everything that private equity is doing in acquiring businesses and seeding business is furthering that goal.\u201d<\/p>\n

They\u2019re also optimistic about global deal activity<\/strong> now that the financing markets have normalized and refinancing options have improved. Rizzo said, \u201cEven over the last few weeks, we\u2019re getting more calls on new deals<\/strong> \u2013 not just minority deals and secondaries \u2026 but proper LBOs.\u201d He said he\u2019s seeing more auction processes leading to signed deals, as well as an uptick in carveouts and take-privates.<\/p>\n

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Size \u2013 and Location \u2013 Matters<\/strong><\/p>\n

Another trend noted at the event is the growing divide emerging between large, global PE firms and everyone else<\/strong>, both in terms of an advantage in winning deals and ease of fundraising.<\/p>\n

Liu<\/strong> from EQT described how his firm\u2019s strategy of operating smaller offices across Europe has helped strengthen its dealmaking capability. Compared to many PE firms whose only European presence are U.K. offices, EQT has offices in more than 25 countries across Europe, Asia and the Americas. He said this \u201clocal with locals\u201d approach pays off<\/strong> when there is a deal in a particular country because \u201cwe know everyone there. So that’s what our investors invest in.”<\/p>\n

Hirsch<\/strong> of Hamilton Lane maintains that going public in 2017 was key to building his firm\u2019s brand globally<\/strong>, especially in Asia, and has made the firm much more competitive. While noting that he\u2019s never seen a fundraising logjam as he sees today, Hirsch also foresees longer hold periods are here to stay regardless of the fundraising environment. \u201cYou have GPs in love with assets \u2013 if they have a great business that\u2019s compounding in double digits, they\u2019re reticent to sell it,\u201d because he says, trying to find a new asset that they\u2019ll be able to grow the same way is riskier.<\/p>\n

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Trends and Predictions<\/strong><\/p>\n

What might PE look like in the near future? The event participants offered a few predictions based on trends they\u2019re seeing:<\/p>\n