Anterion advise emerging as well as established Private Equity Funds. Contrary to exchange-listed companies, Private Equity represents a vast majority of companies in Europe. The owners of these companies include families, foundations, various types of Fund Managers, Pension Funds and other types of investors.
Whereas most listed shares are traded on a daily basis, Private Equity is not. Hence, transactions are not on "Auctions" via an Exchange, but a transaction based on private negotiations between seller and buyer.
In order to access the market for Private Equity, professional investors often can only invest via Private Equity funds.
Whereas 10-15 years ago it was more a matter of being skilled at financial engineering to be a successful PE manager, today it is different. Special additional skill-sets are now required such as deal structuring, operational and marketing optimization etc. in order to add value to an investment besides the capital (of which there is plenty). Add to that the network required to "source" the good deals, and you have substantially reduced the amount of attractive PE funds.
By selecting the most talented managers, investors are likely to achieve above-average returns. In our view, supported by industry data, smaller successful funds run by newer managers will outperform the larger, more well-established names. The reasons are multiple, one major reason being that the smaller funds operate in a SME market niche where the larger capital providers cannot participate and, hence, avoid auction-pricing on their deals.