Paul Newsome, Unigestion
Paul Newsome is head of portfolio management at Unigestion, a Switzerland-based asset manager with a global private markets platform.
Paul has been at the firm for two decades, during which he has set up its private markets operation in North America, and has been instrumental in establishing its directs, co-investment and secondaries programmes.
In this discussion with Ross Butler of communications business Linear B Group, Paul reveals the international growth story behind Unigestion’s expansion across private markets investment, how the asset manager makes effective investment-decisions (with reference to their proprietary AI tool), his reading of the prevailing market volatility and what it means for investors and the asset class, and his outlook for further industry growth.
If you want a crash course in private markets asset management at the turn of 2023, you are in the right place.
The Fund Shack private equity podcast – overview
Paul discusses various aspects of private equity and investment decision-making. He begins by highlighting the importance of an AI-driven machine learning model that analyzes 40 variables to predict the performance of private equity deals. These variables encompass factors like Earnings Before Interest, ESG criteria, sector performance, and macroeconomic indicators. This tool has demonstrated impressive accuracy, helping guide investment decisions by providing probabilities for deals achieving better than 2x returns.
Paul also delves into the challenges facing the private equity market, including a drop in fundraising and increased concentration among larger managers. He notes that private market valuations have been less affected by recent economic uncertainties compared to public markets. Secondary markets are another focus of discussion, with Paul explaining their preference for more concentrated portfolios and participation in GP-led deals and LP stake acquisitions. He anticipates that secondary pricing may change as LPs become more motivated to sell, and valuations adjust accordingly.
The conversation touches on investment strategies, including the importance of vintage diversification and investing in fundamentally sound companies with robust cash flows and long-term growth potential. Paul briefly mentions UniCredit’s growth and scalability within the private equity industry, emphasizing that while growth is possible, there are limits to how much they can scale certain strategies.
Overall, Paul provides valuable insights into the private equity industry, the role of AI in investment decision-making, market challenges, and the strategies employed by his firm, UniCredit, to navigate the evolving landscape of private markets.
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