Munich Private Equity Partners

Interesting read from UBS on family office’s asset allocation. According to their latest report, high-net-worth individuals and wealthy families are increasingly turning to private equity, with the asset class set to represent 22% of their portfolios in 2023. In particular, private equity funds and funds of funds are in demand, currently accounting for an average of 11% of family office’s asset allocation and expected to hit 13% by 2024.   The study lists three key reasons for the growing popularity of the asset class, and funds/fund of funds in particular: Long-term returns, diversification and General Partner expertise.   Why do these aspects resonate with family offices? Let’s add a few thoughts:   1. Long-term returns   Over the past decade, the global Private Equity Index has consistently outperformed the MSCI World by over 7% annually, according to a study by Cambridge Associates. With their long-term investment horizon and lower immediate liquidity needs, family offices are well-positioned to capture this illiquidity premium.   2. Diversification   Building a diversified private equity portfolio in-house requires in-depth market, sector and industry knowledge and therefore a substantial level of human and financial resources. Funds of funds offer an efficient “one-stop-shop solution” by investing in multiple funds across various countries, sectors and vintages, making them accessible with a single commitment and also with smaller tickets.   3. General Partner expertise   It’s the nature of our industry that the most interesting managers are nearly inaccessible to investors who don’t have longstanding relationships with these GPs or bring any other special “asset” to the table to position themselves as a beneficial partner. Funds of funds bridge this gap by building these relationships over many years and thus providing also new or smaller investors with access to their typically highly oversubscribed funds.   Also worth noting: According to UBS, the number one concern for private equity investors over the next 12 months is the lack of exits and liquidity. These concerns are consistent with what we also gather from our daily conversations with LPs.   We typically advocate for a nuanced view that takes into account the different segments of the market. While liquidity challenges are significant at the larger end, the lower mid-market historically showed more consistent deal activity and returns due to a wider range of exit-route opportunities, including selling to other funds or strategic investors.   This is exactly our sweet spot as a focused fund of funds providing access to best-in-class lower mid-market buyout managers in Europe and North America. Reach out if you’d like to know more.   Chart: UBS Global Family Office Report 2024   Link to the study in the comments!

Huge congratulations to our partner Montefiore Investment who has been awarded as Best Mid-Cap Investment Fund at Private Equity Magazine’s 19th Grand Prix Awards! 🍾🥇🙌 Well deserved! Again, a great testament to the exceptional teams we are privileged to be partnering with 🚀 #CapitalWithCharacter

📰 #PrivateEquity: Navigating the Next Phase of the Cycle After a period of fewer #PrivateEquity transactions and a stalled IPO market, a turnaround is in sight. As the economic outlook becomes clearer and financing conditions improve, deal activity is expected to pick up in the second half of 2024. Many investors currently on the sidelines may then be more open to reinvesting in the asset class. It will be interesting to see what lessons they have learned from the recent market phase, writes Hans-Christian Moritz in a guest article for INTELLIGENT INVESTORS. Therein, he explores: 🤔 Why #PrivateEquity investors are currently holding back on new commitments, despite historical evidence that #Buyout funds launched at the end of a recession and shortly thereafter have consistently achieved above-average returns. 🌵 What effects have led to a temporary shortfall in liquidity in institutional investors’ portfolios and how this is contributing to a more cautious investment approach. ⚓ And why, as momentum picks up again, we may see a greater focus on segments that have proven particularly resilient in the recent multi-crisis environment. Thanks to Alexander Heftrich for the opportunity! Read on to learn more ⬇️ #CapitalWithCharacter

🔎 #Hiring!   You bring excellent academic credentials in accounting or an equivalent qualification, along with at least three years’ relevant professional experience preferably in #AlternativeInvestments? Luxembourg GAAP is very familiar to you? And you’d love to work in a dynamic, vibrant and international environment where different perspectives are encouraged and valued?   Then join our growing #TeamMPEP as 𝐒𝐞𝐧𝐢𝐨𝐫 𝐅𝐮𝐧𝐝 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭 (𝐦/𝐟/𝐝), more specifically our Luxembourg team around Andrew Lake and his colleagues.   With us, you can expect long-term perspectives and professional development opportunities at one of Europe’s leading #PrivateEquity fund-of-funds specialists.   For more details on this role take a look at https://lnkd.in/dgzFsvu7 or reach out to Andrew Lake directly via LinkedIn.   We’d love to hear from you!   #CapitalWithCharacter

📢 Milestone reached: We've recorded the 100th exit! 🚀   Since our founding we've consistently invested in the most sought-after fund managers in Europe and North America. Across all 100 exits within our MPEP lower mid-market portfolios, the capital invested has nearly quadrupled on average with a gross MOIC of 3.8x. 💪   How did we get there?   🌟 By focusing on the lower mid-market. This segment offers several structural advantages over the larger end of the #PrivateEquity market, e.g. a larger pool of potential targets, more conservative valuations, higher value creation potential and more exit options.   🔎 By relentlessly investing with managers showing proven outperformance potential through sustainable competitive edges. The mature funds of our partners have almost all historically generated more than 3x gross MOIC fund level returns.   🔒 By providing access to these highly successful and sought-after managers. In the numbers: 94% of MPEP's fund investments in North America and Europe have been heavily oversubscribed.   That said, the most important driver of our success remains the people who relentlessly screen the market to find these outstanding managers and gain access at a point when they handpick only a select group of new investors – our passionate #TeamMPEP.   A huge thank you to everyone who has accompanied us this far. It's been an amazing journey so far, and there's much more to come. Stay tuned! 🚀   #CapitalWithCharacter

✨ We are delighted to extend a warm welcome to our newest #TeamMPEP member! Christian Marx has joined our Luxembourg office as a Senior Portfolio Manager. 🙌 He brings a wealth of experience, having most recently worked as a Senior Portfolio Manager with a focus on #AlternativeInvestments at Ampega Asset Management. Before that, he started his career in AXA Germany’s investment strategy department. 🎓 Christian is a trained banker, holds a Master’s degree in Business Administration (“Diplom-Kaufmann”) and is a CFA charterholder. 🔎 Outside the office, Christian enjoys exploring Luxembourg and its surroundings with his family. As a father to a curious 2-year-old boy, he finds joy in discovering new places and experiencing the international community that Luxembourg offers. Very excited to have you on board, Christian! #CapitalWithCharacter

Interesting piece on Private Equity International again. The article refers to a study by Jeffrey Hooke of Johns Hopkins Carey Business School, with one of the key findings being that funds below US $10 billion outperformed their larger peers with a Kaplan Schoar Public Market Equivalent (PME) of 1.43 versus 1.05. Would be interesting to see how the performance further deviates in the different segments below the US$10 billion fund size. I like that it challenges investors to go beyond what is broadly seen as the safe way to get PE exposure. Hard to argue the structural advantages at the lower end of the market (larger target universe, lower valuations, more room for value creation, etc.) that allow managers to more effectively take advantage of the active and long-term ownership model in private equity.

Berlin calling! 👋🚀 Next week, our #TeamMPEP will once again be joining SuperReturn International in Berlin! This leading #PrivateEquity conference brings together over 5,000 LPs and GPs from across the world, offering a great setting to network, share ideas and further build relationships. Are you attending? Let us know – we would love to see you in Berlin! Hans-Christian Moritz Christopher Bär David Schäfer Irma Turkic Dominik Wolf Tim Ruetzel Marc Schiedermeier, CEFA, CIIA, CESGA Daniel Pelzl #CapitalWithCharacter

Exciting news! Our new website is live! 🌟 We are delighted to announce the launch of our completely refreshed website, www.mpep.com! 🚀 Modern design, easy navigation and more insights into our investment strategy, portfolio success stories and the faces behind MPEP. A heartfelt thank you to everyone involved in our #TeamMPEP and a special shout out to the amazing team at UNIBRAND for their unwavering support and exceptional work in concepting, designing and templating 🙏. Check it out - we'd love to hear your feedback! #CapitalWithCharacter

Back in Munich after two exciting days at the 0100 Conference CEE 2024 in Prague. I really enjoyed participating the panel on fundraising in this dynamic market and especially our discussion on the changing demands of LPs in an increasingly complex environment.   Thanks to all participants and special thanks to Danai Musandu for the entertaining moderation. Amazing job also by Zero One Hundred Conferences (PE & VC Platform) for organizing this event, already looking forward to next year! 🙌 Munich Private Equity Partners