“Private markets, a key source of diversification”

Our Private Markets Investor Relations experts discussed current trends and opportunities in this asset class at our web conference on private markets on Wednesday 12 June.

Investment in private markets, an asset class that includes private equity, private debt, real estate and infrastructure, was until a few years ago reserved for institutional clients. “Nowadays, these investments are used by high net worth individuals as a key source for diversification and accessed through Tiera Capital, Indosuez Wealth Management’s private markets franchise. These long term, low volatile and highly diversified strategies provides access to assets with low correlation compared to listed markets,” comments Florent Saint-Quentin.

Since 2001, Indosuez Wealth Management has enabled its clients to include these assets into their portfolios. As Niels Andres explains, the Tiera Capital team offers expertise helping clients to build and monitor their portfolios This team currently manages the equivalent of €10 billion in investment.

Towards a market recovery

“Due to higher inflation, which affects consumption and the functioning of companies, geopolitical tensions and the rise in interest rates, Private Markets have had two rather challenging years,” acknowledges Florian Ménard. “These factors have led to a decrease in deal activity. Managers have taken a wait-and-see approach, delaying some exits. As a result, distributions were lower, which made fundraising in new vintages more difficult.” Although far from being at a standstill, particularly in the Middle Market Buyout segment, which is at the heart of Tiera Capital’s investment strategy, the market was slowing down until recently.

In this context, valuations have adjusted slightly and we are currently observing multiples close to those seen before the record figures for 2021 following the recovery in activity post-pandemic.

However, since the spring of 2024 we have seen an acceleration in asset exits, a sign that the market is recovering. “For clients who do not yet have private assets in their portfolios, this is probably an attractive entry point as a way to benefit from lower multiples and a gradual recovery in deal activity,” explains Florent Saint-Quentin. “For those who already have private assets in their portfolios, we believe it is important to  diversify the entry points by putting capital at work on a regular basis.”

A conservative approach based on independent selection and diversification

With this in mind, as Sophie Bourroux pointed out, Tiera Capital leverage on their expertise to help clients building an allocation within the private markets asset class. The platform offers investors the opportunity to gain exposure to different sub-asset classes: Private Equity Buyout, private debt and real assets via the primary market, while also offering secondary market opportunities as well as a co-investment programme. “Thanks to our institutional quality Due Diligence process, we complete a systematic independent and rigorous selection process, favouring General Partners with a proven ability to create value within portfolio companies through operational performance improvement.” she explains.

We remind you that any investment involves risks. Please review the characteristics of private markets before considering an investment.

June 21, 2024

June 21, 2024

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