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BERLIN – The largest annual gathering of Private Equity is called Superreturn, but its yields have not been also very super recently – bringing the industry to exhort investors to get out of uncertainty.
During this year’s conference in Berlin, Germany, there was a clear acceptance that a boom previously planned in 2025 in mergers and acquisitions and the initial public supply activity has not materialized. And this puts the investment capital – which has increased following the major financial crisis as a source of alternative financing to banks opposed to risks, now competing with many of them for size – under pressure.
But panels and discussions on the sidelines during the event showed a lot of combat spirit, some participants defending themselves against the story that the realization is dried up or that public contracts could be a better bet for returns. Many enthusiastic by ripe growth areas for support for investment capital, including European defense companiesMiddle undervalued and data centers in the Middle East.
The event at the Intercontinental Hotel welcomed nearly 6,000 participants this week, with Keynotes from the titles of the co-president of the Carlyle group, David Rubenstein and the vice-president of Blackstone, Thomas Nides. The tennis superstar Serena Williams and the singer U2 Bono were also among the speakers.
“There is no doubt that outings have slowed down due to the opposite winds of geopolitical tension and volatility on public procurement. Consequently, we have seen companies staying private longer,” Nalin Patel, private capital research analyst at Pitchbook, told Pitchbook. An “outing” refers to the time when an investment capital fund is leaving its investment in a company, whether by a sale, an IPO or a process called recapitalization of dividends.
Pitchbook data for the first three months of 2025 showed that the release values in Europe have dropped 19% quarters, as the number of outings dropped by 25.2%.
The industry is, on the other hand, holding nearly 30,000 undeled companies worth 3.6 billions of dollars, according to a walk report Bath. This means that limited partners (LPS) – Investors in funds – cannot make yields or access to money, while general partners (GPS) – Fund managers – are more distributed through their portfolio companies.
American prices were mentioned several times to Superreturn as having reduced the overall appetite for market risk, coming just when the industry had bet on a respite after being shaken by the COVVI-19 pandemic, the disturbances of the supply chain and higher interest rates.
Cycle slowdown
Yann Robard, Directorial Partner at Alternative Asset Manager Dawson Partners, told a crowded crowd that private markets were going through a cyclic drop, but that “on average and long-term, our analysis suggests that investment capital surpasses public procurement”.
Evaluating data since the beginning of 2000, Robard said that an investment of $ 1 in a Russell 3000 index would have generated a return of 6.6 times compared to a return of 19.9 times in investment capital. He added that the sector has better resisted volatility despite its higher lever effect – illustrated by a flood of private capital, which has tripled in the last decade, going from 5 billions to 17 billions of dollars.
The overvoltage of Private Equity was supported by more than a decade of ultra-basic interest rates, with a transition peak in 2021, because low rates reached a covid rebound and budgetary support packages. A basic problem that now hangs on buy -back companies is that a lot “just paid too much” during this period, said John Romeo, managing partner of management consulting Oliver Wyman, on the sidelines of the event.
“It is perhaps for good companies, but they just paid too much, so they will not make the target feedback on them, and it blocked the system a little. At one point, you have to pass,” Romeo told CNBC. “I am always very optimistic in investment capital.”
“If I compare how well a investment capital company is well prepared at their monthly meeting of the board of directors with a company, it knows perfectly the ins and outs, compared to an investor of the public market which simply does not have the same level of information or levers to control.”
More consolidation, demanding investors
In recent years have experienced new trends in the world of investment capital: the rise of continuing vehicles, in which companies essentially have participations in their companies in the new funds they have created; Value of net assets (NAV), where loans face the underlying value of a portfolio; and secondary, in which existing interests or assets are purchased from private investor investors of investment as a means for the LPS to access the species.
“The secondary market is hot, it is on fire,” said Richard Hope, head of EMEA and investment co-chief in Hamilton Lane.
Although it can occur as a way to overcome industry challenges, Hope said: “Those who invest in the secondary market really like it. It is short -lived, this gives you liquidity closer, and this actually gives you an improved return. Some investors are considering a positive way and want to add it to their portfolio.”
There was a push towards Involve retail investors in space – Traditionally, the reserve of major institutional investors – including via a negotiated stock market launched by State Street and Apollo Global Management in March.
Family office The representatives were also a notable presence in the field in Superreturn.
Consolidation has been another consequence of the changing environment, which Rob Lucas, CEO of CVC Capital Partners, plans to continue.
He agreed that the market sees stronger and weaker cycles, and was currently in the latter, but stressed that making the right investments during periods of volatility generates the strongest yields.
“What our LPs are looking for us is more demanding, in return, governance, compliance, sustainability, AI. All these areas are extremely intensive and require depth and strength of platforms,” he said during a panel.
“The groups meeting are a natural part,” he said, adding that investment capital was still a “super strong asset class” with tail winds that supported it.
A common chorus in Superreturn in support of the prospects was the enormous quantity of “dry powder” – liquid assets – always available for many of the largest names in the industry to be deployed, estimated at more than 1 Billion of dollars.
Despite the defense case for the future of investment capital, Superreturn participants agreed that a huge uncertainty remained concerning the macro environment, especially with the question of American trade far from being resolved. Many things are based on the expectations that the fingers are ready on the pimples, ready to set in motion the offers as soon as a return of stability.
Romeo d’Oliver Wyman said that investment capital has extended to highly diverse financial institutions, but would prosper by focusing on its roots of bread and butter – finding companies at attractive prices and being focused on the improvement of profitability.
“Companies have never had, really, so much money … The entry price in which you really go, but you must also have a very clear plan how you are going to lead this value creation,” he added.
