00:00Let's just start with region and this part of the world. General Atlantic has been turning increasingly more active from what I can see in the region the last couple of years. Just talk to us about the strategy here and the region's appeal. Yeah. Well listen we've been in the region. First of all thanks for having me. We've been in the region for a while. We actually did our first deal here almost a decade ago. But really what we started seeing is in the last five years a lot of activity starting with entrepreneurship. Right. I think one of the leading indicators for people like us that do growth equity is when do you see a budding
00:29environment of entrepreneurship that typically then leads to venture capital. And you see it all that all the ingredients you see in the market are really powerful. Right. Young dynamic population population growth. Everyone's digitized. And you see a lot of innovation and now talent coming into the market. So for us the last few years we've started to deploy people both in Saudi as well as across the whole MENA region. It's been a fantastic opportunity. I guess one good example of that is property finder. I did a panel with Bill. Bill Ford and the property finder CEO a year ago actually around Abu Dhabi financing. But then
00:59recently General Atlantic you sold a stake in property finder. But you're maintaining a minority stake. We are. What do you see as the outlook for the company. It's a fantastic business and Michael the founder is an incredible entrepreneur. We invested in that business seven years ago and really helped build it into a regional leader. Right. So it's a little bit the playbook we have at GA is bring global expertise into the region. And Michael's been a great partner. The reason we took a bit of liquidity is there's so much interest in the business and its next stage of growth.
01:29convince ourselves it was time to leave because it's such a great business. How much have you actually got deployed in the region right now. So we've invested over the years over a billion and a half dollars of capital. And that continues to accelerate the last few years when we've really started to have a dedicated strategy around the region. We found fantastic deals whether it's Kayali in the consumer and fragrance markets whether it's Iowa also in consumer eyewear. You've spoke about property finder. It's just it seems like the pace of innovation is really creating much more opportunity.
01:59100 percent. I think we're completely committed to the region. We have been now for five years that we have a local team. And as I mentioned these kind of trends that you see accumulate that starts with innovation. It starts with the talent. Then it starts with then it goes with venture capital. And then the next phase is really this middle phase of growth equity. We see so much momentum gathering. I think it'll become a bigger and bigger region. Do you think that at least when it comes to tech investments the field is becoming a bit crowded. I don't think that's true anymore. I think it was very very crowded in 2021.
02:29where without wanting to be rude you had a lot of tourist investors show up in the market and thought they could be tech investors and thought they could be growth investors. And I'm not suggesting it's the hardest business in the world but you do need a certain amount of specialty and expertise and a lot of experience. And so I think the market has actually cleaned itself out a lot. That doesn't mean there isn't competition. That doesn't mean there isn't capital. But entrepreneurs are really smart. And I'm sure you've heard this from Michael Ianni is yes they want capital but what they really want is a partner to help them grow their business.
02:59And I think that's where you're able to differentiate yourself. So talk to me about Actis. You know you are you know you guys are growth equity investors. But Actis specializes in you know long duration sort of asset heavy infrastructure.
03:12How does that fit into the portfolio. Yeah. The thought the original thought behind this was we actually about five years ago started thinking of the next big theme of investment.
03:22And the energy transition was one of the obvious long term tailwinds that we thought could really drive investment opportunity. And we started our climate growth equity strategy beyond net zero.
03:31But what we really what we realized at the time was the much bigger opportunity was around real assets right behind this energy transition.
03:38And so we started looking for partners that we thought could address that opportunity set. Actis has a unique franchise in history of building renewable power in emerging markets.
03:47That's that's something very hard to do sustainably and deliver good returns. And so we decided to partner with them and really merge that experience and expertise around great business building.
03:55And what sort of opportunity do set set you see in data center infrastructure right now. So this huge deal went through a couple of weeks ago. We spoke to Macquarie asset management.
04:05Yeah. You were the seller and that incident. Listen it's so data center. Actis has expertise in building data centers. And obviously that's at the crossroads of everything we do in our digital franchise at General Atlantic and growth equity and their experience.
04:18And I would tell you the amount of capital required to follow this trend is staggering. And you see headlines all the time around how much capital is being drawn.
04:27But I think there's healthy levels of growth. And then there's a little bit of exaggeration happening in the market where we see tons of opportunity is not behind this whole AI data center build but just the good old transition to cloud and the required infrastructure behind that.
04:40That's an area we're spending a huge amount of time on. We have true expertise. I think it's a theme that has 10 years in it. Yeah.
04:46OK. So I guess that sort of taps us into some of the global themes as well. What are you seeing for the dealmaking outlook going into next year?
04:54You know you started off by saying how are we dealing with volatility in your intro. The truth is I think if you have a consistent and deliberate investment strategy volatility is a very positive thing.
05:04Right. It gives you the opportunity to be a real dealmaker rather than follow the herd. And that's what we're feeling in the market right now is you see it markets shut on and shut off in the publics.
05:13That's an opportunity for us. Private markets get a bit jittery around the credit cycle.
05:17That's an opportunity for us because if you're backing the right long term themes actually we're being we've been able to find better deal origination than almost ever in our careers.
05:25Yeah. There has been I mean obviously there's a shutdown going on now.
05:29So that's impacted IPO activity in the U.S. You know what is your read across to how it's going to impact your part of the market and just sort of you know that things have been locked up for longer.
05:41Because again you know we hear of LPs wanting to they're waiting to get monetized monetization on their on their investments.
05:48Right. Well that's been the hardest part of the business is predicting what happens in public markets in particular for tech investors because the tech IPO market has been incredibly volatile almost schizophrenic.
05:57Right. You'll have some some highlight successes and then you'll have a lot of companies that fail to go public.
06:02And that makes it hard for us to predict. I think there's a positive side to that for us which is as companies stay private longer.
06:08We actually think our product as an investor and a value add investor is better than being a public company.
06:13The flip side of that to your point is we do have to deliver liquidity to our investors.
06:17We're having a very successful liquidity year. So we're we're seeing the market start to turn and become a little bit more liquid for privates.
06:24But it's a trend that we continue to focus on. LPs are extremely focused on getting capital back.
06:28And I think that's going to be a pressure on our industry.
06:30What is your view on continuation vehicles?
06:33I think when they're done intelligently, I think they're a very positive thing for the industry.
06:38And in a way, the way the backdrop I would set to it is every every primary market in the world has a larger secondary market except private equity right now.
06:46And so we've been relying on other for other ways of gaining liquidity.
06:50There should be a way of doing it right in the secondary market. So I expect it's going to continue to grow.
06:55I think there's been criticism that that not the right assets are pitched in the right way to the right investors.
07:01The way we've done it, we have several very successful continuation vehicles.
07:05It's a risk transfer. It allows to provide liquidity to certain investors and allows investors to start to buy into new equity.
07:11So I think it's a part of our ecosystem that will continue. Yeah.
07:14But like everything, it needs to be done right. And how are you viewing the rise of private credits?
07:18And people, you know, people have been saying that private credit is almost the new private equity.
07:23The amount of interest in private credit this year is reminiscent to, you know, the days of 2021, as you were just highlighting.
07:29Do you see this as complementary or is it competition almost?
07:35It's a bit, listen, I think it's been an enormous market share shift from one type of lender, which was regulated to another.
07:41And we have a credit strategy that's positioned really around liquidity solutions, so highly differentiated and focused on alpha.
07:47I think the criticism around some of these strategies that are purely based on flow, so very high volume, will play itself out.
07:54As you know, when credit markets are strong, equity markets usually follow.
07:59And we've absolutely seen that dynamic in the market, but it hasn't really affected our business, if I'm honest.
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