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Analysis

Putting the ‘private’ back into take-privates

Decision by UK Takeover Panel helps private equity firms by removing the obligation on public companies to disclose bidders

SFDR complaints laid bare

The European Commission’s summary of feedback from its SFDR consultation reflects the PE industry’s ongoing perception of the disclosure regime

FCA gets ready to scrub

Financial watchdog’s anti-greenwashing rule is effective from 31 May 2024; The Drawdown checks it to make sure PE ticks all boxes

Strength trAIning

Three ways to nurture generative AI to enhance operational resilience strategies

The FTC’s non-compete ban and its consequences

If you or your loved ones have been incentivised to remain at your current employer, you may be entitled to compensation

Recipe for success(ion)

Chef’s tip: Make sure to carefully fold succession planning into the mixture before cooking up a fundraise

AIFM-P

The ‘P’ stands for: “potential for wider reform in the FCA’s AIFMD review”

Operational Technology Report 2024

Our 2024 Operational Technology Report - with in-depth analyses of the latest tech state of play in midmarket PE, profiles of key operational leaders, and more - is now available to download.

The key to solving the private wealth puzzle

Unlocking capital from non-institutional investors has always been a tough nut to crack for private equity managers, but tokenisation could provide a solution

How can technology streamline market processes for operational professionals?

Implementing and updating digital strategies not only enhances value creation but creates new sources of value, writes Beth Brearley

Private equity’s operational upgrade

Private equity firms used to be able to run on spreadsheets and small back office teams. But as regulation intensifies and investor expectations rise, the legacy private equity operating model requires improvement

Hamilton lane ‘pushes back’ on NAV loans

“We want to ensure the right guardrails are in place to protect LPs,” says managing director John Stake

HNWI hurdling

The UK may have reversed its changes to the HNWI regime but the conversation seems far from over

3…2…1… lift-outs!

Could back office lift-outs take off in Europe as an alternative to traditional outsourcing?

Impact intact?

How impact investment firms use in-house reporting tools to report back to LPs and the arguments for standardisation of reporting procedures

Behind the multiple

Calculating carried interest with TVPI multiples means clear definitions of contributions and distributions are needed, a Colmore case study finds

You can CFO your own way

How collateralized fund obligations are becoming a part of the European fund finance toolkit, opening up the LP lender landscape

Normal service: disrupted

GPs are increasingly focusing on culture to convince the next generation of talent to make the industry their destination of choice

Whatever happened to ESG-linked loans?

As tools for ESG transformation they seem to have been abandoned but they still have their place

Reporting in good nature

Why are voluntary sustainability reporting regimes such as TNFD being adopted by PE firms?

No tiff with the LTAF

The Drawdown catches up with Schroders as it gears up to launch LTAF number three to chat operations, investor base and liquidity management

Technology Report 2024

Welcome to the first instalment of the Technology Report, which shines a light on GPs at the cutting edge of tech adoption for front-office functions, and the providers powering that transformation

Stake a chance on… Blackstone

Josh Blaine and Ward Young discuss the alignment of GP stakes and secondaries

GPs ride the data wave

Demanding LPs and AI advancements have moved the dial on data. But what does a data strategy during a holding period look like? Xhulio Ismalaj reports

Comment: Technology’s sustainability challenge

It is time to embrace the opportunities that come with the technology industry’s shortcomings, according to Bettina Denis, head of sustainability at Revaia

Navigating AI in private equity

Frister Haveman from Gain.pro discusses the role GenAI has in the private equity market and why it should be embraced, not feared

Q&A: The digital edge

Yair Erez and David Poole, partners at Stanley Capital, discuss how the firm is using a combination of proprietary and third-party technology to accelerate target identification and expedite deal conversion

Q&A: A model idea

A bespoke solution was key for ECI’s deal origination process according to Suzanne Pike, partner and head of origination at the firm

Q&A: Building a tech Nexus

NorthEdge’s Lucie Mills and James Hales discuss how the mid-cap GP is using technology to support deal origination, identify potential deal targets and enrich various interactions

Q&A: A journey of discovery

Philippe Laval, chief technology officer at Jolt Capital, discusses its proprietary software platform Ninja, and reflects on the highs and lows of bringing the system to life

Q&A: Transforming with tech

David Floyd, vice-president at global investment firm Permira, talks to The Drawdown about how the business is harnessing advanced analytics and AI to drive competitive advantage in deal sourcing and its funds’ portfolio companies

Going digital

Nicholas Neveling explores how GPs are harnessing big data and AI not only to boost portfolio company performance, but also to provide a competitive edge when it comes to sourcing and executing deals

European Commission rejects ESMA’s ELTIF 2.0 draft RTS

Liquidity mechanisms have been revised to make it easier to set up evergreen funds and to better attract individual investors to private markets, but the proposals still divide the investment community

Stake a chance on… Scarcity Partners

The firm uses an evergreen structure to slow-cook emerging managers in a land down under

Second(aries) to none

Pros and cons of tokenisation for the secondaries market

The Third Party

The borrowers and lenders of fund finance have credit rating company…

Tyrannosaurus Regs?

How are global regulators scrutinising AML procedures and is that oversight increasing?

ELTIF 2.0 – A case study

How Moonfare provides liquidity to its investors via an auction process instead of redemptions

Economic symptoms of longevity

Addleshaw Goddard’s latest Funds Trends Report showcases the effects of longer fundraising and investing periods on the economics of the GP-LP relationship

Next stop – carried interest

Liquidity event delays are having an effect on waterfall calculation models

Untangling Pillar 2 implications

Pillar 2 may not mean more tax for most GPs but it could be a compliance headache

Borne but not raised

A tight fundraising and deal-doing environment has GPs pondering how to structure aborted deal costs

ESG: The fund-of-funds perspective

Once removed from the underlying portfolio, this type of LP is focused on private equity’s journey rather than instant compliance

What the AI?!... Tamarix Technologies

Founder of the data and analytics platform for LPs, Andrea Carnelli Dompé, discusses managing confidential information and AI hallucinations

Sweet sorrow

The alluring attraction of semi-liquid strategies brings with it a cautionary 
tale of liquidity (mis)management

Stake a chance on… Azimut

Giorgio Medda of Azimut Holding explains why it moved into the GP stakes business and what sets it apart from its competitors

My life at ECI Partners

The Drawdown goes undercover and through the firm’s succession programme put in place after the initial founders left

The carrot in addition to the stick

FCA’s proposed regime on non-financial misconduct shines light on firms’ workplace culture

Stake a chance on… New Catalyst Strategic Partners

Jason Howard’s freshly hatched firm, backed by Apollo, aims to support emerging managers, among others

IPEM: Cash and carry

Anxieties about capital and compensation were not far from the surface at the latest IPEM event in Cannes

Discovery gone digital

VC fund-of-funds AlphaQ has launched AQVC discovery platform, a digital hub connecting LPs, GPs and service providers

The ops ‘n’ regs of wealth managers

Amid traditional LPs maxing out their allocations, PE looks to wealth managers to fill the gap – but they come with distinct requirements

Stake a chance on… Armen

The GP stake investor is attempting to differentiate itself through deep roots in the European midmarket, the support it offers GPs and the service it provides to its LPs

Stake a chance on… Investcorp’s SCG

Strategic Capital Group’s managing partner Anthony Maniscalco likes his stakes well done

Dear Irish AIFMs…

After the Central Bank of Ireland’s review of asset valuation processes, Irish AIFMs must make sure their governance models are up to scratch before the end of Q2 2024

5 minutes with… Sander Andersen, founder of Finpeers

Swiss blockchain-enabled fundraising tool launches to connect HNWIs through its digital LP marketplace, aiming to increase access to private equity funds

Operational utopia

If operations professionals made all the decisions, what would the perfect PE firm look like?

Postcards from Portugal: Keep your fund admins closer

In a final reflection from The Drawdown’s Operational Leaders Summit, we highlight views on nearshoring and the need to love your fund admin

Depo mode

Do depositary services add value to PE firms?

Postcards from Portugal… Domicile drop

A post-summit debrief on alternative Luxembourg structures

LPs eyeing up AI

Key use cases identified include fund monitoring and competitor benchmarking

What DEI you mean?

Dynamo’s latest report on ESG reporting finds LPs and GPs have different expectations when it comes to DEI reporting

The UK’s nice green labelling machine

Response to FCA’s SDR positive as regulatory arbitrage remains around applicability to overseas funds, portfolio management and practice of its highly anticipated anti-greenwashing rule

Postcards from Portugal… Top talent

Attracting and retaining junior talent requires clear direction and HR initiatives

ESAs add granularity to RTS

The draft technical standards have some suggested amendments, improving the detail of the disclosures made

ESG, retail investors and you

The latest Efama conference brought together regulators and asset managers who championed the idea for product instead of fund labels and brainstormed ideas for retailisation

Trigger warning

As valuations come under greater scrutiny, GPs must carefully consider the triggers for valuation challenges under the terms of their NAV facilities

SDR policy launched

The FCA is introducing an anti-greenwashing rule, four product labels and marketing requirements for investment funds

Moving surety from obscurity

Surety could be an overlooked, low cost liquidity solution in a time of portfolio optimisation

Home game Sweden

A change in tax legislation and ethical considerations are leading Swedish PE firms to onshore their funds

Budget breakdown

The Drawdown watched the UK's Autumn Statement so you didn’t have to

Southern Europe: Structures to suit all tastes

Variety is indeed the spice of life when it comes to fund 
domiciles across Southern Europe

Cayman Islands removed from FATF’s grey list

Effective prosecution of financial crimes was key element to de-list but domicile stays on EU’s AML blacklist

Crossbreed funds

How PE is shedding its ‘illiquid’ skin and creating hybrid funds to access the private wealth market

What the AI?!... Schroders Capital

Head of global venture investments Steven Yang delves into the machine learning toolset that the firm’s data team has developed during the last decade

There and back again

Matthias Plötz reports on the success or otherwise of German GPs´ Luxembourg holidays

Firm identity

A tight fundraising environment and ESG fund naming conventions warrant a closer look at the names of private equity entities, writes Matthias Plötz

Stake a chance on… Kudu Investment Management

The firm provides permanent capital to boutique investment firms

Unrealised potential

The ILP has not yet led to a surge in funds being domiciled in Ireland, writes Jon Whiteaker

AIFM-Done

As the EU concludes technical discussions around the AIFMD review, The Drawdown takes stock

Abris Capital launches DEI code for portfolio

Firm makes commitments across education, governance, ownership and process with the aim of influencing industry practice

Must NAVs

The benefits and risks of NAV financing in a liquidity drought

Island appeal

The Channel Islands have established strong reputations 
as domiciles and intend to keep them

The digital CFO

While most CFOs would protest at the idea of their entire role being outsourced, an example of a plug-in CFO service is the upcoming launch of Corvus Group. Is it time to outsource the CFO entirely?

Wheels in motion

The UK is working hard to restore its attractiveness as a domicile post-Brexit but it’s not there yet

What the AI?!... Triton Partners

Head of technology Lyndon Arnold updates us on the firm’s outlook on AI and its potential use cases, as well as its ongoing implementation of the technology.

Breaking the mould

Does Luxembourg deserve its position as the default domicile in Europe or should GPs be more willing to consider alternative jurisdictions?

Stake a chance on… Bonaccord Capital

The firm’s GP stake strategy focuses on capital formation and ‘creating an enduring institution’

Edi Truell’s super plan

Pensions mogul outlines his next DC market consolidation plan after the ‘mothballing’ of Pension SuperFund

weather eye

Matthias Plötz asks: Will the distant winds of the SEC's Private Funds Rules force changes to European GPs' playbooks

Rubbish in, rubbish out?

The latest SFDR consultation gets the industry thinking about improving entity-level disclosures

FCA lays out priorities for asset management regime

Regulator´s chair discusses AIFMD´s future in UK regulatory regime and highlights proportionality as guiding principle

(De)generative AI

As AI technology develops, so do the associated risks

Avocado toast and carry

An open ear for the next generation’s concerns and demonstrating how PE can address them could be the key to answering the talent question

What the AI?!... PAI Partners

Marc Boullier, managing director and lead for IT and digital transformation, talks all things Alfred, the firm's own LLM-powered assistant

The roots of diversity

A diverse hiring process should focus on removing unconscious bias at the roots of your business rather than just getting the optics right

DORA the implementer

Following ESA’s public consultation, The Drawdown takes a closer look at the impending regulatory technical standards

New tools needed?

CFOs in the European midmarket worry about talent retention and whether their management strategies will be enough to nurture the leaders of tomorrow, writes Jon Whiteaker

What the AI?!... Montagu

Partner Daniel Fischer believes there are AI opportunities to be developed in risk management workflows

Red flags

At what point does a potential
investor become a reputational risk?

What the AI?!... NGP Capital

VP of data analytics Atte Honkasalo and partner Christian Noske discuss how NGP’s internal startup search platform is shaking up operational workflows

DIY in the wild wild East

Across Lebanon and Palestine, enterprising GPs are piloting their industry with no legislative framework or operational ecosystem, as Matthias Plötz investigates

Dancing to the same tune?

With GP stake investors increasingly eyeing the European mid-market, GPs must ensure they are in sync with their new partners.

What the AI?!...Equipped.ai

CEO of Equipped.ai Ed Green shares how the firm is making operations smoother with automation

Govern up

Shaking off reputation by association can be tough in emerging markets

Taking the plunge

The vast pools of capital located in the UAE remain the main draw for private equity firms but a local office is increasingly needed to access them

What’s in a name?

European Commission’s Retail Investment Strategy to further amend AIFMD and do away with ‘undue costs’, broaden definition of professional investor and ban inducements

Sounds of the summit… Tech spec

A post-summit debrief sees BGF’s Alastair Pilgrim and Federated Hermes’ Matt Guy discuss developing tech stacks

Sounds of the Summit… ODD one out

As fundraising gets tougher, ODD processes are getting longer and more demanding. However, according to speakers at the Operational Leaders’ Summit, there could be some bright spots amidst the gloom.

For FX’s sake! How not to manage FX

As heightened volatility continues to push FX up the agenda for private capital funds, we explore some of the common pitfalls managers have been facing.

The great rebundling

UK signals plans to reinstate research payment bundling, diverging from MiFID II

Sounds of the summit… Carry a torch for ESG?

Many GPs have talked about linking carried interest to ESG metrics but are any of them actually doing it?

Pen to pension

How DC pension master trusts are looking to tap into PE

Lux the builder

How have the Luxembourg toolkit updates affected the funds industry?

Around the books in 80 days

GPs' travels through the auditing process

‘GPs are becoming more creative’

Following his move from Travers Smith to Dechert, we caught up with fund formation veteran Sam Kay to get his take on the current market

Sounds of the summit… Asset managers assemble

Discussions from OLS concluded that the time to create a ChatGPT policy was yesterday. Here’s why your firm needs one too

Goldman Sachs launches ELTIF

We speak to Barry Fricke, head of EMEA alternatives distribution for wealth at the firm, to understand the operational setup of the fund

Regulators continue to woo retail investors in PE

As France proposes to remove further ELTIF restrictions, the FCA issues a policy statement opening up LTAF to retail and DC pensions schemes investors

What the AI?!... Amadeus Capital Partners

We speak to Amelia Armour, partner in the early-stage fund, to understand AI’s strengths and limitations in applications at VC funds