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10 June 2024

Is the golden age of Private Equity just starting?

Industry leaders discuss the future of Private Equity

Johannes Huth smiles at a comment. He has glasses and is wearing a suit with a pink tie
Left to right: Joanne Sonin, Johannes Huth, Andrew Mc Caffery

Leaders from the Private Equity and investment industry joined a panel at King’s Business School to discuss the role that the industry might play in the future.

Kick-starting the discussion, Johannes Huth, Partner and Chairman of KKR Europe, the Middle East and Africa, gave an overview of the industry’s evolution over the last half century while Andrew McCaffery, Global Chief Investment Officer at Fidelity International, provided a full picture of the current investor base for private equity and why that base is broadening. Joanne Sonin of NorthPeak Advisory emphasised the importance of integrating material sustainability and ESG issues throughout the investment process and journalist Simon Nixon, a former columnist at The Times and Wall Street Journal, provided acute observations about the political context to the discussion.

The event was convened by King’s Business School Executive Fellow and Founder of Wyvern Partners, Anthony Gahan (BA Modern Languages, 1988).

Much of the public’s understanding of Private Equity has focused on the role of leverage in driving returns, but this discussion emphasised its unique place in our financial system. To achieve the things we all want as a society in terms of the transition to a low carbon technologies and better infrastructure takes capital and private markets can provide that.

Anthony Gahan, King's Business School Executive Fellow & Founder of Wyvern Partners

Among the points raised at the event were:

  • We can only deliver a transition to a more environmentally sustainable economy, as well as the infrastructure improvements that we need, by harnessing private markets
  • Private Equity investors are aligned with societal expectations around ESG issues, not least as a means of risk management
  • While public markets have greater transparency, Private Equity’s model of fewer owners and more actively engaged investors makes for more effective governance. Many companies that have been taken from public to private may not have been suitable for public markets in the first place
  • We are now seeing a shift to enable defined contribution pension schemes to access Private Equity
  • Democratising access to Private Equity would help more people to meet their long-term savings needs
  • However, the industry will need to offer a different kind of product to individuals, including addressing their expectations around greater transparency and liquidity.

Concluding the event, Dr Robyn Klingler Vidra, whose research focusses on venture capital, commented that there is increased interest in private capital’s ability provide ‘patient capital’ to businesses at all stages in order to drive improvements and technological innovation.

The industry has gone from being seen as the ‘barbarians at the gate’ to ‘humanity’s last great hope’ as Christopher Mims of The Wall Street Journal put it.

Dr Robyn Klingler Vidra, Reader in Entrepreneurship and Sustainability

Further reading

Read Anthony Gahan and Dr Robyn Klingler-Vidra's opinion piece in Private Equity News on why business schools should teach Private Equity at undergraduate level. (Subscription required)

Find out more about King's Business School's Executive Fellows

In this story

Robyn Klingler-Vidra

Reader in Entrepreneurship & Sustainability

Anthony Gahan

Executive Fellow, King's Business School