00:00What we're seeing on the fundraising side is that there is a polarization of money being directed to the best performer.
00:07So while in the past, LPs have been quite happy to diversify and sprinkling a bit their investment across a variety of funds,
00:15today is no longer the case.
00:17And this is driven really by the fact that distribution has missed expectations.
00:22When you look at the growth of the industry in the last 10 years, the assets under management have grown by threefold.
00:29While the distribution, the cash, has been reduced in percentage of the net asset value.
00:35So there will be winners and losers in the fundraising game.
00:38But funds which have consistent performance, a very differentiated approach to investment, will get the majority of the investment.
00:49And the others either will go into runoff or they will need to be consolidated.
00:53And Simona, do you think there are new avenues for fundraising for a lot of private funds that are tackling these difficulties?
01:00Like what are they exploring right now?
01:03Wealth management is clearly the channel where everybody is going towards.
01:08So we are seeing products being, while in the past it was just creating feeder funds and using wealth management platform to distribute funds.
01:16Now the industry has become much more sophisticated and we are moving to creating products which sometimes have a bit more liquidity than the traditional private equity fund to appeal to a broader investor base.
01:31Simona, just hang on one second because I think Oliver Cook is speaking to Keir Starmer.
01:36So let's listen in.
01:37In relation to sanctions.
01:38But for me, this is clear evidence that Putin doesn't seriously want peace.
01:44He's dragging his heels.
01:46And that's why today is a really important opportunity to work with colleagues to make sure that we are absolutely united.
01:53And President Zelensky will be here today.
01:55So we will be discussing the situation with him.
01:57On the Brexit reset, how are the talks going?
02:00Will you have talks on the sidelines ahead of the Monday summit?
02:03Well, in the last two weeks you've seen the UK do a trade deal with India, really important for our country and our national interest.
02:10Trade deal with the US, again important for our country and national interest.
02:14I'm positive going into Monday.
02:17And I think that this is an important moment for our country that will be measured in the benefits to working people and their living standards.
02:26But we're positive as we go into the summit on Monday.
02:30Thank you very much.
02:31So you think we'll get over this.
02:32Is there any issues that says she wants?
02:35So that was the Prime Minister, of course, of the UK, Keir Starmer, speaking to reporters.
02:39They're in, of course, where Oliver Crook was.
02:42Simona, I mean, there's a lot.
02:44We'll go back to, you know, some of the private funds and some of the fundraising they're exploring.
02:48But overall, there's been a lot of trade news.
02:49We're expecting UK, EU, the summit to be on Monday.
02:53Any time there's positive news from trade, does it actually help with fundraising?
02:57If you look at some of the things that fund managers are trying to do to lure investors, is short-term confidence a real game changer?
03:06Yes, it definitely is.
03:07And it's not only short-term confidence as a very important effect that helps the deal environment.
03:12And what we were discussing is that the LPs are still committed to the private capital industry, but they need distribution back.
03:20And the distribution is driven by the deal environment.
03:23Now, as you know, we started 2025 hoping for the animal spirits and this sluggish deal environment to improve.
03:31We haven't seen that, but actually it has been better than expected.
03:35Because when you look, for example, better than we think in April, the M&A in the U.S. has gone up.
03:41There have been amazing deals, big deals in the tech sector, in the software, fintech.
03:46So if we keep the deal machine going and the liquidity going up, this virtual circle will restart again.
03:52So all these signals are very encouraging.
03:55But are there, I mean, it's still a very small trickle of deals, right?
03:59So are some smaller private equity market players going to be in trouble?
04:03I think the smaller undifferentiated with poor track record will definitely be in trouble.
04:13The industry has grown maybe too much over the last 10 years.
04:17So a bit of rationalization might happen.
04:20So one of the trends we are seeing is consolidation.
04:22So you will see larger players trying to acquire small one to maybe enter new countries or to enter new strategies as well.
04:32What do you see on fees?
04:33Are you seeing fund managers, for example, using discounts to lure in investors?
04:37We're seeing more creativity, early bird, more complicated structure, this for sure.
04:45But I think overall there is still liquidity that is going to go around.
04:49And Simona, do you really see a differentiation depending on the regions, on the countries where you're looking at actually doing some of these deals?
04:57Yes, there is definitely differentiation.
04:58So when you look at Asia, the U.S. and Europe to do biggest generalization, I think in Asia they are looking at Europe now in terms of an avenue to diversify from the domestic Chinese market where most of the capital has flown.
05:14Or they're looking at India and Japan.
05:16In Europe, we're looking at some cross-border as well, but there is a lot of interregional activity as well.
05:26I think the U.S. is the one that is taking a pause and looking around the world and figuring out who their friends are.
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