IPEM Cannes 2024 – The Daily Spin – January, 25th
The shifting role of LPs was the overarching theme for the morning session of Day 2, at the 10th edition of IPEM in Cannes. After a full day of yoga,…
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IPEM Cannes | Wealth 2025: A New Promise Awaits!
As we reach the mid-point of the decade, this is the moment for European private market investors to think big and steer Europe’s economy towards brighter times. To reflect this, the theme of IPEM Cannes | Wealth 2025 will be “New Promises for Private Markets”.
While the era of cheap capital and high leverage might be over, there are significant tailwinds for GPs to harness and ride the next wave of innovation, seeking out creative ways to do deals and accelerate performance. Digitization and other mega trends offer huge potential for GPs to consider how to build companies, invest in large-scale projects, and find new ways to transfer the economics of value creation over an extended timeframe. The private wealth industry is looking closely, seeking more and more ways to partner with best-in-class managers to develop novel, ‘evergreen’ fund vehicles and put capital to work that can transform the interests of Europe for decades to come.
Could this lead to more consolidation as large asset managers acquire private markets firms?
BlackRock recently acquired the private credit firm HPS for $12 billion (having previously acquired Global Infrastructure Partners for $12.5 billion) and as Chief Executive Larry Fink told analysts on a call in July, “we envision we could bring the principles of indexing, even iShares, to the private markets”.
A nexus for Europe’s GP and Private Wealth community
Cannes has long celebrated gathering Europe’s mid-market GP universe for three days of non-stop networking, knowledge sharing and social engagement. The 2025 edition will be even more special with the introduction of a dedicated private wealth track. GPs will have the opportunity to interact with more than 500 wealth investors, including 250 single- and multi-family offices, private banks and wealth managers: a new promise for building key relationships at this key inflection point for both industries.
Sticking to our roots, IPEM Cannes | Wealth will ensure that the dominant trends shaping “New Promises for Private Markets” are diligently addressed across the two days of the main conference.
This is a must-attend event for private market GPs wishing to kickstart their year with a comprehensive calendar of meetings to accelerate their deal flow; as well as hear from fellow peers on structuring, sourcing and closing deals in the current climate. It’s the perfect way to fire your imagination and get your creativity bubbling…much like the champagne that will flow during three nights of social activities.
With invitation-only VC, single-family office, women dealmakers and sustainability lunches to attend, delegates will have no shortage of ways to connect and expand their professional network.
Dealmakers and allocators will find the gateway to the twin worlds of private markets and private wealth on Level -1 / Croisette of the Palais des Festivals. As well as a host of workshops, a wealth lounge, a dedicated meeting pod zone, the Croisette will also be the location of IPEM’s two main conference rooms.
The Private Markets track will be split into three elements: main conference thought leadership sessions, summit sessions and breakout sessions.
Infrastructure & Real Assets, Private Debt, Venture & Growth as well a newly introduced Private Equity Summit, underscores just how much IPEM has broadened its lens to cover all aspects of private markets: essential for private wealth investors as they plan their meeting schedules for this three-day bonanza.
The Breakout Sessions will blend key developments related to fund structuring and European wealth destinations alongside value creation and impact to further energize the debate among GPs and private wealth allocators.
“We will also introduce some wealth topics in each summit,” explains Antoine Colson, CEO and Managing Partner, IPEM. “For example, in the infrastructure summit we’ll touch on several infrastructure products that were sold to retail or wealth investors to look at whether the asset class is the right fit. We will do the same with private equity, private credit and venture and growth.”
🔎 Some of the main conference private market topics will include:
🔷 Pan-European dealmaking in 2025
🔷 PE performance in the next cycle
🔷 Reassessing the role of private capital in the European economy
🔷 Evolution in secondary markets
🔷 Megatrends investing in Europe: climate & energy transition
François Jerphagnon is Member of the Executive Committee, Managing Director of Ardian France & Head of Expansion Ardian.
Ahead of speaking on the pan-European dealmaking panel, Jerphagnon believes the interest rate backdrop in Europe could help in 2025 “but it’s not a major factor. The major factor is uncertainty around business development, consumer spending, purchasing power. Is it good to have interest rates going down? Yes. Is it a game changer? No,” he tells IPEM.
Despite the decrease in overall deal sizes, there are expectations of increased activity in the European private equity market for 2025. This is partly due to the closure of postponed exits from 2023 and a rebound in the IPO market. However, the market has still been somewhat sluggish, with a 4% year-on-year decrease in completed transactions in Q3 2024 compared to Q3 2023.
Valuation gaps could narrow in 2025
Valuations remain lower in Europe compared to the US, in general. At Ardian, Jerphagnon doesn’t expect a major change in valuations in 2025, especially for companies that are resilient and growing “because today the market favors a lot of these companies and that’s been going on for at least 12 to 18 months”.
“At a time of uncertainty, we don’t expect these kinds of assets to decrease in terms of valuation multiple because they will become more and more scarce. On the other side, you have companies where there’s not enough visibility for buyers to make a bid, or the price they offer does not match sellers’ expectations. The pressure on DPI, which is probably today the main factor for investors, is going to increase. GPs will have to sell and that will help with valuations,” he says.
The newly released BlackRock 2025 Private Markets Outlook report points out that private assets, at large, will provide opportunities to invest across the entire AI value chain. This digitization trend, fueled by AI innovation, looks to set to define the way sponsor-backed companies operate and build value over the coming years.
As GPs hold on to assets for longer, this could have a knock-on effect by lowering internal rates of returns – particularly with less leverage being used. Most likely, it will ultimately depend on the quality of the GP, the quality of the assets in their fund(s), their ability to drive higher earnings, seek out bolt-on acquisitions etc. Some GPs will want to hold trophy assets for an extended period. Others will be under pressure to sell, to Jerphagnon’s earlier point, because they need the liquidity.
Consumer businesses, industrials and healthcare services are sectors in which valuation gaps continue to persist, with B2B services and tech in general the two sectors that offer the most promising prospects in Jerphagnon’s view.
He adds that simply pursuing buy and build strategies in one’s deal playbook is not enough. What is needed is the strategy behind it to increase the portfolio of products or services, to extend the geographical reach. “Otherwise it doesn’t make sense. The strategy has to be aligned with the fundamentals of the company,” he says.
As GPs assess the deal landscape for 2025, there is always the reassurance that no matter how complicated the global macro picture may be, good companies can always be found; those with a differentiated product or service offering and a viable path to grow internationally.
“There are clouds everywhere. But as long as 10% to 20% of the deals we analyse look interesting, that’s enough,” states Jerphagnon.
Private markets are set to grow and innovate rapidly. This is the time to shape the discussion and bring private wealth leaders into the fold. IPEM Cannes | Wealth 2025: the forum for bringing private capital closer to the real economy.
Read the first article about the IPEM Cannes | Wealth 2025 Program 📅
Get ready for IPEM Cannes | Wealth 2025 on January 28-30 at the Palais des Festivals
Over 3,500 delegates from 1,300 firms, including 500 LPs, 500 GPs, 300 Advisors & Business Services, and 250 SFOs, Private Banks, Multi-FOs, Wealth Managers will be there, don’t miss the opportunity to connect with them!
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