The Valt Journal #04
Featuring 2023 Midyear insights by KKR, Ares, Blue Owl, PwC & Capital Group; GP-Led Secondaries by Neuberger Berman, A crisis of confidence by KKR, Private Credit Manager Selection by Adam Street.
Hi, Welcome to the new edition of The Valt Journal. In every issue, we cover the best and the latest insights into the global private markets. The Valt Journal is a repository of time sensitive and timeless research, delivered to your inbox every 2 weeks, so you don’t have to look anywhere else! Clicking the headlines is all it takes.
REPORTS AND RESEARCH
KKR Midyear Update 2023
KKR
Investors can create attractive vintages in both the private and public markets. It is a compelling time to be a global lender and the focus should be on high free cash flow conversion stories, especially corporate carve-outs and public-to-private transactions.
Ares Market Insights: Unwinding the Market’s Clock
Ares Management
Vintage years with lower overall fundraising tend to outperform crowded ones. Timing allocations is difficult for LPs however steady commitment pacing paired with diversification across vintage years may help reduce risk.
GP-Led Secondaries: Private Equity’s Most Underserved Market?
Neuberger Berman
Current macroeconomic and capital market conditions appear to be creating attractive investment opportunities for secondary buyers. Will GP-orchestrated “continuation funds” help with this liquidity challenge?
The growth and diversification of secondaries
Franklin Templeton
PE Secondaries have traded at a discount to NAV since 2007, with more attractive pricing during periods of economic slowdowns. This is partially driven by the “denominator effect”. Is this the time to buy?
Oaktree Insights - Top takeaways from Oaktree’s quarterly letters
Oaktree Capital
The easy-money era is truly over and the consequences for investors can be profound. Will a starkly different environment produce a new set of outperforming asset classes?
KKR Credit & Markets - A crisis of confidence
KKR
Confidence in the current environment is important and has contributed to a structural shift away from leveraged loans and into high yield and private credit.
2023 Direct Lending Outlook
Blue Owl
Explore the five key investment themes for direct lending in 2023 by the Blue Owl team.
European VC Survey 2023
SpeedInvest
While the way US and European VCs approach investing is quite similar, there are a few striking differences. What do the European VC investors think?
EDHEC Infratructure Strategy 2023
EDHEC
Infrastructure investments are increasingly becoming mainstream. Data shows that they can withstand inflationary pressures and demand fluctuations better than other alternatives. Could hydrogen be the next big opportunity?
2023 Outlook Midyear Issue
Capital Group
It’s a great time to be an active investor and look for opportunities on a global scale. There’s a lot of cash on the sidelines and this could be the time to consider putting it to work.
Distributed ledger technology and private markets
Broadridge
Private market managers are improving core operational processes to satisfy investor demands. Can distributed ledger technology (DLT) be a solution for operatonal transformation?
ARTICLES
Alternative Credit - increased opportunity from market disruption
AXA Investment Managers
With liquidity reduction and banks’ lending conditions already tightened, the role of alternative lenders has become further important.
Asia’s private markets show signs of resilience
Institutional Investor
The Asia-Pacific region has a stronger exit environment, which may help private equity and venture capital firms recover more quickly.
Alternative investment ideas for an uncertain world
Wellington Management
What are the economic and market forces that are expected to influence portfolios in 2H 2023 across alternative asset classes?
Private Equity valuations - Can they be trusted?
Abrdn
There is a lack of understanding as to how high-quality private equity managers value their portfolios. Private equity valuations don’t behave like levered listed equity, as many assume. But, can we trust PE valuations?
US Deals 2023 Midyear Outlook: Private Equity
PwC
PE-related deal volumes have declined ~30% over the past year, taking the market back to pre-COVID levels. The start of 2023 has seen a continuation of 2022’s significant slowdown in PE-related deal activity as buyers and sellers navigate ongoing macroeconomic turbulence, challenging debt markets and global geopolitical uncertainty.
A Real-World Investment in the Age of AI
Blackstone
AI’s foundation is data and the infrastructure required to use it, which is one reason why Blackstone experts believe that AI isn’t a bubble.
Challenges and Opportunities in Today's Real Estate Market
Hamilton Lane
The current market juxtaposition – with low vacancies and double-digit rent growth versus market volatility and reduced liquidity – creates a few challenges in determining the value of a real estate property in today’s rapidly shifting environment.
It’s a lender’s market in Private Credit
Institutional Investor
Higher yields, increased negotiating power, and favorable business cycle conditions have made private credit one of the most attractive alternative investment.
Is Strategic M&A Finally Catching On in Private Capital?
Bain & Co.
Linear growth in assets creates exponential growth in complexity. Strategic M&A is on the rise in the private capital industry. But that doesn’t mean achieving success has gotten any easier.
ELTIF 2.0: Reforms Set to Drive Growth in European Private Markets
State Street
The European Commission’s recent amendments to the European Long Term Investment Fund (ELTIF) rules have the potential to significantly increase both the volume and source of capital flows into European private markets.
Climate transition bonds: putting capital to work where it's needed
Abrdn
Energy transition creates a once-in-a-generation investment opportunity. Can investors play a part in the battle against climate change while also seeking attractive financial returns?
Dissecting Web 3.0 for Private Markets Investing
HarbourVest
What is Web 3.0? What is it not? And why should private markets investors care and what are the major misconceptions?
Private Credit Manager Selection: Devil is in the Diligence
Adam Street Partners
Look for private credit managers with three key characteristics – a proven approach to underwriting, a differentiated approach to originating and winning deals, and a capital base that matches their opportunity set.
Private Market Insights – June 2023 Edition
UBS
Quick snapshot of latest trends, drivers and news across private asset classes.
Trends across alternative investments
JP Morgan
Private capital fundraising is off to a more modest start in 2023 with $418 billion raised YTD across alternative asset classes vs c.$1.4 trillion in 2022. What are the latest trends in the alternatives market?
Hands-On operational improvement is key to creating alpha in the middle market
Morgan Stanley
The middle-market PE landscape has evolved significantly in the past decade with increasing investable dry powder each year. What are the factors that drive the true alpha?
PODCASTS, VIDEOS AND INTERVIEWS
Relative Attractiveness of Direct Lending
Stepstone Group
In this podcast, listen to Fabian Körzendörfer (MD - Private Debt) talk about how direct lending may offer attractive risk-adjusted returns. (~13 min)
The State of Private Markets
Bloomberg
In this video, Marc Lipschultz (Co-Founder & Co-CEO - Blue Owl Capital) discusses the state of private markets and opportunities in direct lending. (~5 min)
The Power of Diversification in Private Credit
PIMCO
In this short video, learn why diversified private credit exposure is key to enhancing returns, reducing risk and positioning for the longer term. (~3 min)
The Opportunity in Private Credit Today
Blackstone
Private credit has been experiencing secular growth for years, expanding from 5% of the sub-investment grade market in 2005 to 24% in 2022. While private credit can be high-risk, Blackstone considers it defensive—provided that lenders back strong businesses, remain senior in the capital structure and put the right protections in place. Watch this video where Brad Marshall (Global Head - Private Credit Strategies) discusses the strong tailwinds behind private credit. (~2 min)
Q&A with Jeff Levin and Mark Jochims
Morgan Stanley
Read the discussion between Jeff Levin (Co-Head - North America Private Credit) and Mark Jochims (Head - European Private Credit) on private credit perspectives.
Q&A With Vivek Mathew
Antares Capital
Read the interview with Vivek Mathew (Head - Asset Management) where he shares his thoughts, insights and some numbers on the private debt market.
SuperReturn International Conference Berlin 2023
SuperReturn
Quick links to short interviews with global asset managers and thought leaders in the SuperReturn International Conference, held in Berlin in June 2023.
David Rubenstein (Co-Founder and Co-Chairman, Carlyle)
Armen Panossian (Head of Performing Credit, Oaktree Capital)
Hazem Ben-Gacem (Co-CEO, Investcorp)
Lee Kruter (Head of Performing Credit, GoldenTree)
Dr. Karim El Solh (Co-Founder & CEO, Gulf Capital)
Imogen Richards (Partner, Pantheon)
Stephanie Flanders (Senior Executive Editor, Bloomberg)
GLOBAL ASSET MANAGERS - STOCK PERFORMANCE
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