Axios x Weil – The Next Era: Private Equity’s Global Path

We were delighted to bring together Axios’ leading journalists with dealmakers and market executives for wide-ranging on-the-record conversations to unpack the trends of today and the opportunities of tomorrow.

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New York | May 21, 2024 | Watch Here

More than 120 influential leaders from across the private equity landscape convened at Moonlight Studios, where Axios business editor and author of the daily Axios Pro Rata newsletter Dan Primack kicked off the event with a one-on-one conversation with New York Stock Exchange President Lynn Martin. The pair discussed the state of public markets, IPOs as an exit opportunity for sponsors, challenges associated with election-year volatility and the role of artificial intelligence – which is allowing the NYSE to operate on more effectively and efficiently.

“We're not that far off from a quasi-normal year [for the IPO markets],” Martin observed. “And we're working with a variety of companies in the pipeline who, now that they have the confidence…[are] making plans to go [public] in the second half of the year.”

In a View From the Top segment hosted by lead Axios publisher Nick Johnston, Weil U.S. Private Equity Co-Head Christopher Machera and Private Equity partner Robert Rizzo discussed the importance of cross-Atlantic collaboration and the impact of regulatory and market dynamics on dealmaking, how sponsors are adapting to the “new norm” debt market, and optimism around an uptick in LBO and traditional private equity deal activity, as seen the below clip.

View From the Top with Co-Head of U.S. Private Equity Christopher Machera and Private Equity partner Robert Rizzo

“Client interest in cross-border opportunities has been accelerating over the last few years, especially with European clients coming into the U.S. and penetrating this market,” whether it be through an organic build, importing people into New York or through acquisitions,” said Machera.

“It's hard to have this conversation about the U.S. without Europe and vice versa,” added Rizzo. “There's just so much connectivity across the Atlantic these days. When you look at private equity in particular, there's been a huge shift of capital coming this way from the European sponsors. Europe is smaller than the U.S. – it's a little tumultuous at the moment, so we're seeing a lot of sponsors look to the U.S. and to our markets into our targets when it comes to private equity and other acquires.”

Co-CEO of Hamilton Lane Erik Hirsch then took the stage alongside Primack, delving into the evolving dynamics of private equity, including the relationship between private and public markets, the rise of private credit, and the potential of tokenization and AI to transform the industry and expand access for retail investors.

“This industry has changed very little in the last 40 years, getting them to completely rethink how it works is going to take some time. ... We're going from basically writing checks to getting people to be used to using Apple Pay. That will take some time, but there will be an inflection point and it will happen.” said Hirsch.

The morning wrapped up with a keynote conversation between Primack and Eric Liu, Partner, Head of North American Private Equity, and Co-Head of Global Healthcare Sector Team at EQT Group. Liu detailed how interest rate cuts can serve as a driver (or non-driver) for increased dealmaking in private equity, emphasizing the industry's resilience and adaptability to market conditions. The pair also discussed the trend - perhaps a reversion to the norm - of longer holding periods for investments, differences between U.S. and European private equity culture, as well as the impact of AI in creating operational efficiencies to benefit the next generation of private equity leaders.  

“It's only been a recent phenomenon that people have been able to hold things two or three or four years,” explained Liu. “And that's because multiples are expanding. When they're flat or maybe contracted, you’re just going to have to hold assets longer in order to generate the same multiple investment.”

London | May 22, 2024

The next day, on the other side of the ocean, The Next Era: Private Equity’s Global Path continued at an exclusive, invitation-only event, with more than 50 private equity leaders congregated at the renowned Dover Yard in Mayfair for the second day of the series.

The evening commenced with a View From the Top conversation with Axios publisher Nick Johnston joining with Weil’s Global Private Equity Co-Head Marco Compagnoni and Co-Managing Partner of Weil’s London office and Private Equity partner Jonathan Wood. The two commented on the longstanding, seamless interaction between the U.S. and European private equity markets, highlighting the significant role of New York and London as central hubs for dealmaking and financing. They also discussed the increased sophistication and regulatory and political scrutiny in the industry, noting ongoing opportunities and challenges in maintaining global operations amidst evolving market dynamics.

“Because our markets interact, we can work together seamlessly. Private equity dealmaking in the UK and European markets arrived only a short period after it really emerged in the U.S. And in that period, there has just been an enormous amount of interaction between the European and U.S. markets,” said Wood.

Axios reporter Lucinda Shen then took to the stage with Co-CEO of Apax Partners Andrew Stilltoe to talk about the current private equity market landscape, emphasizing the changing nature of exit routes for portfolio companies and the increasing importance of private markets, particularly in London. Stilltoe went on to explore the nuances of AI adoption in investment selection and the complex geopolitical considerations facing investment firms in today's global environment.

“Obviously AI can be embraced internally in terms of how we make ourselves more efficient and make better decisions. It can be embraced by portfolio companies as well to code faster, to service customers better and more efficiently. But, I think right now for us that the most important area where we're spending most of our time thinking about AI is really around investment selection… The damage you could do now is by investing in a business that is going to be disrupted in the next five years,” remarked Stilltoe.

Finally, Shen was joined by KKR’s Co-Head of European Private Equity, Philipp Freise, for a review of KKR's European private equity strategies, focusing on tapping into a broader investor base and emphasizing value creation beyond financial engineering, as well as dynamics in private credit markets.

“I think what's really important is that our industry has worked so hard to create value not by financial engineering, but by changing the companies who invest in it,” said Freise, adding, “So in order to participate in that value creation, you need to open up the ability to invest in it. It's basically giving people that before had the opportunity to invest…in the public markets, the ability to invest in the private markets now.”

About Weil’s Private Equity Practice

Weil's global Private Equity practice is recognized by the industry as being one of only a very small number of elite market leaders in this field. Weil is committed to driving innovation and excellence for financial investors and providing unparalleled insights and expertise to our clients globally. Our clients consider Weil as their go-to private equity legal advisors, and include many of the highest-profile private equity funds, sovereign wealth funds and pension funds, as well as family offices and other equity financial investors.

Weil advises more than 300 private equity clients worldwide, ranging from middle-market buyout firms to each of the 10 largest global private equity funds and 80% of the top 25 largest global private equity funds as ranked by PEI 300 2023. Our advice covers all aspects of the investment life cycle, and we are renowned for our expertise, comprehensive understanding of the private equity landscape and underlying industries, and tenacity in helping clients execute in a competitive market.