At Patrimonia 2024, Maxime Vanneaux, Head of Partnerships at Private Corner, answered the following questions: What's new for private equity investors? What differentiates Private Corner from other private equity platforms? How can ESG be quantified in private assets funds?
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Introducing Private Corner
Private Corner is a native digital asset management company, founded 3 years ago, 100% dedicated to investing in private assets. We provide our wealth and asset management partners with a selection of funds with an institutional dimension, accessible from €100,000 upwards, whereas these funds are usually managed for highly sophisticated investors from several million euros upwards. We can cover the entire universe of private assets, including private equity, infrastructure and private debt. Let's talk about this with our two experts.
What's new for private investors?
Unlisted investments, which arrived in Europe and France some thirty years ago, and a little further afield in the United States, are a constantly evolving and innovative asset class today. Historically, asset managers who used to cater to institutional investors are now keen to broaden their investor base. They have neither the human nor the technological set-up to do this, so they turn to people like Private Corner to open up the investor spectrum to wealthy clients with an approach that remains institutional.
What about interest rates?
Don't think that private equity, or in any case private assets, are a martingale for any type of investor. It's a market that's anything but disconnected from reality, anything but out of touch with the world. In fact, more than any other asset class, it is connected to the entrepreneurs and economic fabric of France, Europe and the United States. The unlisted sector is going through a cycle impacted by the macroeconomy, like any other asset class, where deployments are a little slower, as are distributions and disposals. The huge advantage of these managers is time, because they have the time to deploy, to help themselves, and this is what, for the best of them, enables them, over a long time horizon, to generate very stable, very linear and high-quality performances over time.
What solutions do you offer private investors?
At Private Corner, our model is not necessarily to democratize the asset class at all costs, and sometimes at any cost. We are convinced that we need to work with you, with our distribution network - since you are our customers, and we don't have a BtoC approach - to professionalize and institutionalize the experience of your wealth management customers, based on institutional standards. So our model “mirrors” the experience we could have with one of your customers, who would be a pension fund, investing several tens or hundreds of millions of euros in underlying assets. And at Private Corner, we have both a core portfolio offering with a secondary private equity approach and a private debt approach, as well as a thematic offering linked to the environmental revolution, for example in healthcare or other sectors.
What will differentiate Private Corner from other private equity platforms?
It's true that private equity platforms have democratized in recent years and that there's a lot of communication about the asset class at the moment. The most urgent thing is to be patient. You rarely make mistakes when you take the time to do what you want to do. And customer trust takes a long time to build up, so it's important to do exactly what we do for them, as we would do for ourselves. At Private Corner, this is exactly the model we apply, with an institutional approach, with a model that “mirrors” the institutional approach and those famous progressive calls for funds, a very fair and transparent economic model. It's a model designed to preserve the value creation of the teams and underlying funds we select, while ensuring that the margins for us and for you are in line with your expectations. And it's a selection - because we're first and foremost also a selector - that's intended to be diversified and complementary, to enable you, on behalf of your customers, to make an allocation to unlisted companies over time that's complementary, personalized and as diversified as possible.
Decarbonization, a new theme
We have just launched a feeder with Tikehau Capital, one of the world's leading unlisted asset managers. It's an offer that fits in with the thematic private equity fund approach we want for our customers, and which may complement a core portfolio approach in secondary or private debt, for example. It's a very promising theme over a long time horizon, with extremely predictable winds at its back, and with a lot of education and storytelling, it will enable customers to get their foot in the door of this asset class with a very fine player, with a very balanced structuring in terms of business models, and with the prospects of a non-listed brick that will optimize the prism of risk, return and volatility of a financial allocation for a wealthy customer.
How is Private Corner navigating this market with these new entrants?
We've always paid close attention to the fee structure, since this is one of the historical biases of private assets, which we've known from a very different approach in the past, namely the tax approach. Private Corner's objective here is to validate an alternative route that will enable your clients to access very exclusive and very institutional managers who would charge €5 or €10 million, or even more, for direct access to these funds, with a very global fee model, clean share, with retrocession shares provided by Private Corner. The aim is also to be able to apply entry fees, but not carried interest on Private Corner funds, which is what we do on the management of underlying funds, and all this with the aim of realizing that on a long-term asset class, a difference in fees each year for a long time can be very significant in terms of IRR and exit multiples. We pay close attention to this. We don't want to be part of a phenomenon that could be disappointing for your clients in the short, medium or even longer term. But to have a long-term, sustainable approach to the asset class, and I think that's very important today.
How do you create value with ESG?
ESG is a fairly obvious subject in the unlisted sector, insofar as the assets are held, on average, for 4 to 6 years by unlisted managers, during which time risks can crystallize, whether financial or extra-financial. There is a real need to support funds in the analysis and study of the E, S and G pillars, which are very important to ensure that the company retains strategic value on exit, to exercise this famous liquidity. Some asset managers are now setting up in-house teams to deal with these very important value-creation issues.
What tools do you offer to asset managers and their investor clients?
In reality, Private Corner is a management company for selecting managers and structuring feeders, coupled with a digital platform that is 100% proprietary to Private Corner, enabling us to optimize the entire lifecycle of the asset class, from initial contact to reporting. We need to streamline an asset class that has historically been rather cumbersome in terms of administration, an asset class that has been opaque in terms of the information it provides. At Private Corner, we're disciplined and respected for this, for our digital platform, for our investor portal, which will enable us to track the opinions of clients and funds following investments, with enormous granularity. For example, we're able to produce half-yearly reports with granularity on all the lines for your clients to which they are exposed on the underlying funds. This is extremely important, because that's what non-listed investments are all about: giving meaning to one's investment and keeping track of one's investments. And it's our service approach, our range of services that we're constantly improving and that we offer alongside our selection and products.
What are Private Corner's future developments?
On the selection side, we're always on the lookout for exclusive, institutional funds, and for specific features in these funds that will enable you to access players that you might not even have in mind, and which you and your customers would never have been able to get into. We remain proactive and are making progress on the development of our digital platform. We're thinking about optimizing the regulatory side. And Private Corner, which has its work cut out for it in its domestic French market, also has ambitions for pan-European growth in the future, although this is not an end in itself. And so we're looking at how the countries around France operate, to give this more global approach to our business.
