00:00We'll come on to the French politics in just a moment, because there's a number of interesting questions around it,
00:03but let's start off with the fund that you've raised and your outlook in terms of the industry.
00:09It's interesting. At the moment, it seems as if European private equity funds are maybe able to raise money at the moment
00:15because they're European, which sounds slightly counterintuitive.
00:19But Europe feels like the diversification trade right now. Is that making your life easier?
00:24Good morning, Guy. Yes, absolutely. I think we have, first of all, we are very happy with this success.
00:35It's not only a big number, 20 billion, but it's also doubling compared to the previous generation.
00:40I think it's some different things explain this very positive outcome.
00:44First, as you said, I think there is a willingness of global investors, and we raise more than 60% of the fund outside Europe,
00:52to diversify, and probably they were underallocated in Europe in the past, so they decided because of this current environment,
00:59which is very difficult to read and very difficult to forecast to be diversified,
01:03and Europe, after all, is a stable place, even though the economy grows is slow.
01:08The other factor is that we are investing in the megatrends of our economies,
01:13which are obviously the connectivity, physical connectivity, which is transport.
01:17As you know, we are shoulder, the main shoulder of Israel. We recently announced the acquisition of a group of airports,
01:23including Venice, but also the virtual connectivity with data centers, fiber, all the digital infrastructure,
01:30and the enable of all this is energy transition.
01:33So I think it's both the region and the themes which appear very attractive to investors.
01:38Matthias, we've had a long period, though, when it has been relatively easy to raise money,
01:44and you wonder whether that period is coming to a conclusion right now.
01:48Do the big get better as a result of that?
01:51If you are a big firm, if you are able to attract funds,
01:54does it become easier in this kind of environment,
01:57with the kind of infrastructure that the big funds have around them,
02:00to generate money from LPs,
02:03whereas in the past, actually, everybody has found it relatively easy?
02:07Is that environment changing? And if so, what are the implications?
02:12Not really. Maybe slightly better.
02:14But in fact, what we are seeing is that the market, especially the B2B,
02:19so the institutional market for fundraising remains quite sluggish.
02:23So it's just the market share of certain players which are growing,
02:28which feeds their fundraising.
02:30So we see a strong concentration movement.
02:33And the reason for that is that, basically, in the current environment,
02:37it's very difficult to bet on financial market to create value.
02:40You really have to have specific expertise.
02:43You should be able also to raise in the private investor market.
02:46And this requires really strong capex, strong investments,
02:50and just the leaders can afford that.
02:52So that is really what is driving the market.
02:56First, the concentration of the market.
02:58So the biggers raise even more than before.
03:01And the mid-size or the mid-cap of the smaller managers struggle probably to raise.
03:09That's the first factor.
03:09And the second factor, which is a driver, is the private wealth.
03:15And this market is really the new frontier for all the large private equity players as Ardian.
03:24Matias, can you tie this fundraising, this deal activity?
03:29I heard, or at least it was reported, that 40% of this new fund has already been deployed.
03:34So you have 60% of the new cash raised looking for deals.
03:38Are you perhaps deterred by what's going on in France?
03:42We just heard from our reporter there that they are considering things like a wealth tax across the nation.
03:47Does that deter you from looking at French companies?
03:49Well, as French citizen, I am obviously very frustrated by this instability, French instability.
03:59But I think we should not take too much, factor too much what this instability in the economy.
04:08And you see that basically the market has been sanctioning France after the presidential decision to dissolve the chamber.
04:18But in reality, the market has factored that.
04:21And we are just experiencing what was already anticipated by the market.
04:26France has strong institutions.
04:28And, for example, we don't have such a shutdown.
04:30So in case there is no budget or there is a difficulty to find budget in the coming months,
04:36what will happen is that we will take the existing budget and we will extend it until the next presidential election.
04:43You know that in France, what drives really the politics are the presidential elections.
04:49And that's what really will lead to, again, a stability and a new, we say, economic plan.
05:00Matthias, it's also you've raised this fund to invest in things like energy, transport and digital infrastructure.
05:06Which of those buckets are you more excited about potential returns?
05:10But the beauty of that is that those three buckets are very synergetics.
05:16There is no data centers if you don't have energy, if you don't have cheap energy, and if you don't have decarbonized energy.
05:24Connectivity, as I said, for me, infrastructure, and you know that private equity firms have very different definitions of infrastructure.
05:30Our definition is very consistent, is capital-intensive assets in what we call connectivity.
05:38Connectivity, real connectivity, like transport, airports, roads, but also virtual connectivity, obviously.
05:47But to basically to feed and to all this, you need energy, just the enabler.
05:53So all this is very consistent.
05:54So there is synergies between them, but also there are counter-cyclicals, meaning that, for example, if you are exposed to data center, you are sensitive to the cost of energy.
06:04But if you produce energy, then you balance this reality.
06:08So all this means that portfolio construction is more than ever something which is very important.
06:13And that's also something I think that our clients have a value, not only the strong absolute performance, but also the consistency across the cycle, the ability to deliver performance across different cycles.
06:27Matthias, good morning. It's Lizzie here.
06:29Are you worried about what's happening in private credit?
06:31We've had Jamie Dimon, the JP Morgan CEO, of course, warning that with Tricolor and First Brands, there's never just one cockroach.
06:39There's almost more to come. Are you worried that there are going to be more collapses in the pipeline?
06:46I think we should have a... Yes, we anticipate that the cost of credit, as the bank speaks, will increase.
06:55I mean, we have been experiencing a decade with the capital and the debt was flowing massively at almost zero cost.
07:02We are entering now in a more, I would say, normalized environment, as if we look back to the history.
07:11And we will see that some companies, some borrowers who have bets on excessively on capital markets and excessively on the ability to grow, will experience difficulties.
07:23But I don't think we will have a massive, I would say, systematic problem, it's more that we will see the cost of credit raising and discipline and capacity to analyze risk and have a disciplined approach will make the difference between different managers and different banks as well.
07:42Do not recognize that they were watching a couple topics.
07:49Let's jump in.
07:58Absolutely.
07:59Perfect.
08:01We will send you back a little bit more back at the time.
08:03Let's see if you want something more likely to say your example.
08:07Come in.
08:08As you probably and don't you want to происходит , next?
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