Month: April 2024

MidEuropa pioneered private equity buyout investing in Central Europe, launching in 1999. Robert Knorr has been a partner since 2007. He was recently awarded Private Equity Mid Market Leader of the Year at the Real Deals private equity awards for his pivotal role in investment in the region. In this podcast he talks to Ross Butler about opportunities from Poland to the Med, and a very big win in Romania with Profi.

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Key Highlights

In this episode of the Fund Shack podcast, Ross Butler interviews Robert Knorr, Managing Partner at MidEuropa, to explore the firm’s pioneering role in private equity investment across Central Europe. MidEuropa, established in 1999, has become a key player in the region, transitioning from venture capital to buyout funds. The discussion highlights their strategic focus on sectors such as consumer goods, healthcare, and technology, emphasizing the importance of sustainability and digitalization in their investment strategies.

Private Equity and Buyout Funds: MidEuropa has been instrumental in shaping the private equity landscape in Central Europe. Their transition from venture capital to buyout funds has been a strategic move to capitalize on the region’s economic development and emerging markets.

Investment and Economic Development: The firm’s investments have significantly contributed to the economic transition and development of Central European countries, integrating them into the broader European Union market.

Sector Focus: MidEuropa targets consumer goods, healthcare, and technology sectors, areas that offer high growth potential and align with their strategic investment goals. Sustainability and Digitalization: Emphasizing sustainability, MidEuropa promotes energy transition and sustainable practices. They also leverage digitalization to enhance business services and operations.

Corporate Carve-Outs and Cross-Border Investments: The firm has successfully executed corporate carve-outs and cross-border investments, demonstrating their expertise in managing complex mergers and acquisitions (M&A).

Nearshoring: Leveraging the talent pool in Central Europe, MidEuropa facilitates nearshoring of services, providing cost-effective and high-quality business services.

Financial Returns and Investor Relations: The episode details MidEuropa’s approach to delivering strong financial returns and maintaining robust investor relations.

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#privateequity #investment #centraleurope #sustainableinvestment #emergingmarkets #businessgrowth #economicdevelopment #venturecapital #digitaltransformation #infrastructure #telecom #consumergoods #HealthcareInvesting #poland #techinvestments

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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group

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In this Fund Shack podcast with Ross Butler, Etienne Deshormes, founder of Elm Capital, reveals where the market for private equity secondaries is headed.

Key highlights

In this engaging episode of the Fund Shack podcast, 🎙️ Ross Butler interviews Etienne Deshormes, CEO of Elm Capital, to delve into the intricacies of the private equity secondary market. Elm Capital, founded in 2004 by Etienne after his career in investment banking at JP Morgan, specializes in providing liquidity to private market investors.

Private Equity Secondaries: Etienne Deshormes explains how the secondary market provides liquidity to an inherently illiquid sector. He outlines the development of the market from its early days in the 2000s when it was discreet and associated with distress sales, to its current, more accepted status.

Global Financial Crisis Impact: The 2008 financial crisis was a turning point for the secondary market. Etienne highlights how the crisis forced many LPs to seek liquidity solutions, leading to a surge in secondary transactions. This period marked the only time in his career when assets were sold at a 100% discount, underscoring the desperation for liquidity.

Liquidity Solutions: The discussion includes how the secondary market has evolved as a strategic tool for managing portfolios, not just in distress situations. Etienne notes the rise in the use of secondary transactions to handle overexposure and liquidity issues exacerbated by recent economic challenges such as inflation and rising interest rates.

Current Market Dynamics: Etienne describes the current market conditions, emphasizing the impact of the denominator effect and rising interest rates on private equity portfolios. He explains how these factors have increased the need for secondary transactions as a liquidity solution.

Denominator Effect: The podcast covers the impact of the denominator effect, where declines in public market values cause private equity allocations to exceed target levels, forcing LPs to sell stakes to rebalance their portfolios.

Continuation Funds: Detailed insights are provided into continuation funds, which allow GPs to manage assets beyond the typical fund life by selling them to new vehicles backed by secondary investors. Etienne discusses the evolution of continuation funds from being a last resort to a strategic option for managing high-quality assets and mature portfolios.

Investor Strategies: The podcast delves into how LPs and GPs navigate the secondary market to optimize their portfolios. Etienne discusses different strategies, such as selling single fund interests or entire portfolios, and the factors influencing these decisions.

Market Pricing and Discounts: Etienne explains how secondary market pricing works, particularly during downturns when discounts can be steep. He provides examples from 2022, where buyout funds were trading at significant discounts due to market conditions.

Role of Elm Capital: Elm Capital’s role in the secondary market is highlighted, including how they assist clients in finding buyers or sellers for secondary transactions. Etienne describes their integrated approach to serving both primary and secondary market needs.

Future Outlook: Etienne shares his outlook for the secondary market in 2024, predicting increased deal flow and a gradual recovery in pricing as public markets stabilize. He also discusses the long-term potential for the secondary market to become more mainstream as more investors recognize its strategic value.

Etienne Deshormes explains the evolution of the private equity secondary market, highlighting its importance as a liquidity solution for LPs. Initially met with reluctance, the secondary market gained traction post-2008, providing a necessary outlet during financial crises. Deshormes discusses the current market conditions, emphasizing the challenges posed by rising interest rates and the denominator effect. He elaborates on the mechanisms of continuation funds, their acceptance, and strategic importance in today’s market. The conversation also touches on the operational role of Elm Capital in facilitating these transactions and the future potential for technology to streamline secondary market processes.

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#PrivateEquity #SecondaryMarket #LiquiditySolutions #PrivateMarkets #InvestmentBanking #FinancialCrisis #DenominatorEffect #ContinuationFunds #InvestmentStrategies #Fundraising

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Follow Fund Shack on Your Preferred Platform:

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Apple Podcasts
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Fund Shack is a private equity podcast and global media channel for alternative investment professionals. Fund Shack is produced by Linear B Group and if you are interested in appearing on the show, wish to propose a client, or are interested in sponsorship, contact:

Katie Mitchell

katie@linearb.media

Linear B Group

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