Associate Director, Oliver Middleton, London, recently attended Caplink’s European Private Capital Summit, which featured some of Europe’s leading managers from PE, credit and secondaries, as well LPs and a number of advisors. Here are his five takeaways from the event:
- We haven't yet reached the 'Golden Age' of secondaries: Media narratives about 2025 as the 'year of secondaries' and the start of a 'golden age' overlook the fact that the market is still in its infancy and requires a longer track record. These take years, not months, to build.
- We're still 'only scratching the service' of wealth penetration: As Apollo's Natalia Tsitoura noted, wealth investors - largely IFAs, intermediaries and larger family offices - currently allocating to PE and credit account for roughly 2-3% of the overall market. This signals huge growth potential in the years to come, with the ultimate goal being attracting significant numbers of mass-affluent investors, as pioneered by the likes of Moonfare. The main barrier remains understanding and education, but with the likes of StepStone having recently launched ELTIFs, we will likely see a steadied rise in wealth penetration over the coming years.
- AI is already having a measurable business impact on PE: Many industries are shouting about AI far louder than PE, but when it comes to measurable business impact, PE is likely ahead of the majority. Managers of all sizes are leveraging AI with a focus on due diligence and deepening visibility and understanding of what's happening in their portfolios, which is informing asset selection. But AI will only ever be a tool—not a silver bullet—as good as those using it.
- Geopolitical uncertainty is now the primary barrier to deal-making: In his keynote, BC Partners, Nikos Stathopoulos, highlighted that many of the ingredients for higher deal volume are now there, including better (relative) levels of liquidity, supported by greater bank lending and appetite. However, geopolitical uncertainty, including the potential impact of tariffs, which now need to be factored into projections, could be a barrier to the volumes some were predicting at the start of 2025
- Value will underpin the PE market for the foreseeable: The low-rate environment that until recently enabled debt-fuelled M&A was highly abnormal, and this isn't going to be how the PE industry delivers returns going forward. Instead, PE must return to its roots: building better businesses. This is what enabled the industry to deliver consistently strong returns in the previous high-rate environment, which, until 2008, were the norm.