Odgers Interim’s Post

BlackRock’s Robert Kapito and Blackstone’s Steve Schwarzman discussed key trends shaping the investment landscape. Schwarzman highlighted the rapid growth of data centers, boosted by the AI revolution, citing Blackstone's acquisition of QTS, which has grown sixfold since its purchase. He anticipates further growth due to significant investments in the area, and expressed concerns about the energy demands of data centers. Kapito focused on the dangers of holding cash in a rapidly evolving market, stressing the need for investments in infrastructure that supports data-heavy, AI-powered businesses, particularly data centers. "If you were thinking about real estate, where would you buy real estate today? I would buy in places that I can actually build data centres that are around energy," Kapito said. But Kapito was steadfast in his view that a shift towards a more data-heavy, Al-powered world would require a rethink of energy and infrastructure, particularly as the energy transition rolls on. "We really believe every area of the world is going to go through an evolution or revolution - rebuilding industries, retooling them for energy." #ai #digitalinfrastructure

The UK risks falling behind due to the chronic inability of its capital markets to scale companies. To become the go-to public exchange for scaling tech companies in Europe, our paper with Onward calls for London’s AIM market to be replaced with a rapid route to the LSE for high-growth firms: https://lnkd.in/eMPzQy_h #UK #FutureofBritain #investment #capitalmarkets #technology #science #innovation #development #business

A CHANGING TIME IN THE PUBLIC CAPITAL MARKET. . . . . Right from when I started putting my hands into one of the key areas in the ecosystem that we Falkeh 3Cs serve clients, I have then been learning about the actors there. . . Investment is very important to all businesses. Both small and Big. In fact, they all need one thing; RESOURCES. After human, capital is a very important resource businesses need to run their operation as they serve their customers. . . But one thing I have since the very beginning of this year notice is how the investment ( both private and public ) landscape is changing. The factors behind this, I have written a couple of times in many of my posts and publications. . . Today I only want to share again, one thing that was once an idea or proposition, but became a reality by looking at the data. . . Halfway through 2024, the performance of recent PE-backed IPOs is outpacing that of VC-backed IPOs and major indexes. . . And the truth about this is just adaptation. I have read in the private side of the investment market, how founders from Africa and other regions, especially Europe are using unorthodox methods to navigate this time, using Debt Ventures since they are struggling with valuation, especially the mature businesses. . . PitchBook's PE-backed IPO index is up 28.6% this year, thanks largely to SoftBank-backed chip designer Arm, which has risen more than 150%. The VC-backed IPO index climbed 13.2%, while our index of SPACs is down 17.8%. . . In another news, I read; . . With VC deals down across the US and Europe, it's no surprise that the Asia-Pacific region has also fallen well below 2021's highs. . PE dealmaking continues to be highlighted by firms such as MBK Partners, Blackstone, and The Carlyle Group finding opportunities in the region. China has become a top target for healthcare investors as companies capitalize on opportunities for more affordable medicine. . . I wouldn't know yet, what PEs are offering LPs even with recent struggles in the PE space, but I can say they seem to be a future of the private investment market. . . What is your take? . . CC: image source: PitchBook Newsletter.

A new report by two influential think tanks has called for the abolition of London’s junior stock market, Aim, as part of a strategy to revitalise the UK capital market and attract high-growth technology firms. In our latest article, Nigel Lynn looks at the report that claims Aim is ‘not fit for purpose’ in helping promising tech companies secure scale-up capital. https://lnkd.in/ecKtgyRM #AIM #LondonStockExchange #TheTimes #LSE #Aimstocks #venturecapital #City #London #BaileyMontagu

The ‘democratization’ narrative in private markets has been shrouded as an innovation problem that can ostensibly be solved with net new tech enabling broader access. While tech is certainly needed to minimize the significant operational and executional friction associated with investing in private markets—it’s not the root cause. Access barriers to private markets are predominantly driven by regulation and incentives. In the past year, ~81% ($2.1 trillion) of all private capital raised via the Reg D exemption (by far the most common) were by funds exclusively available to “Qualified Purchasers” (>$5M in investments).* Why? Limiting an LP base to QPs is less constrictive (effectively uncapped raise), lower cost (compliance, operations, etc.), and, generally, the ‘headache minimizing’ path of least resistance. Conversely, including non-QP investors in your LP base incurs incremental costs, a hefty regulatory burden, and, operationally, introduces greater complexity. The market structure and incentives are such that most high-potential GPs/strategies are then likely to restrict their funds to QPs…and, resultingly, capacity-constrained opportunities w/ strong or oversubscribed demand are highly unlikely to be made available to non-QP investors. As access to private markets continues to broaden, investors should be cognizant of the spillover effects of regulation/incentives on the investment opportunities they’re considering. The broader trend where retail investors have somewhat limited access to private markets through interval funds, tender funds, NTRs, etc.—scalable, evergreen strategies—is likely to persist, barring any major regulatory changes. Adverse selection can be a cruel beast.  

Private equity is evolving fast, and staying ahead of key trends is crucial! From the rise of GenAI to the growing role of private credit, our latest AlphaSense blog breaks down the top trends shaping the industry in 2024 and beyond. Don’t miss out on how to stay competitive in this changing landscape!

Private equity is evolving fast, and staying ahead of key trends is crucial! From the rise of GenAI to the growing role of private credit, our latest AlphaSense blog breaks down the top trends shaping the industry in 2024 and beyond. Don’t miss out on how to stay competitive in this changing landscape!

Investing heavily in concentrated markets can feel like riding a wave—until the tide turns... Interesting to see more big-name investors increase their underweights to the 'Magnificent Seven', after a period of exceptional outperformance. The immense capital these companies are pouring into AI infrastructure has raised questions about whether returns will justify the costs, at least in the short-term. Diversification and fundamental analysis remain crucial in an era of passive investing. Relying too heavily on a few high-growth sectors, no matter how dominant, exposes portfolios to significant downside risks if growth falters or spending outweighs profit potential.

Private equity is evolving fast, and staying ahead of key trends is crucial! From the rise of GenAI to the growing role of private credit, our latest AlphaSense blog breaks down the top trends shaping the industry in 2024 and beyond. Don’t miss out on how to stay competitive in this changing landscape!

Private equity is evolving fast, and staying ahead of key trends is crucial! From the rise of GenAI to the growing role of private credit, our latest AlphaSense blog breaks down the top trends shaping the industry in 2024 and beyond. Don’t miss out on how to stay competitive in this changing landscape!