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Impact Investing Insights: LP-GP Dynamics and Emerging Trends

INDUSTRY INSIGHTS, News

Impact investing continues to evolve as GPs work hard to develop effective ways to measure impact potential in their portfolios and improve the quality of reporting. This is something that LPs are increasingly focused on as they screen deals to determine the strength of the impact thesis. Returns are still a priority but investors are becoming more forensic in understanding the tangible improvements to society.

Over the last two years, IPEM has made significant strides highlighting many of the key topics and challenges facing impact funds. During the Impact Summit on Day 2 of IPEM Paris 2024, supported by Astanor, Capricorn Investment Group, Indefi and Simpl, delegates heard about what LPs are looking for in impact funds, opportunities in emerging markets, whether or not impact funds were now mainstream, and investing in education and social inclusion.

Some of the key investment themes that LPs are considering range from industrial decarbonization to food supply chain innovation – i.e. alternative protein, regenerative farming – and plastic waste.

Venture & Growth - Specialization continues to influence Europe’s VC & Growth Market

Specialization continues to influence Europe’s VC & Growth Market

INDUSTRY INSIGHTS, News

Europe’s venture capital industry is still trying to find its feet, as it recovers from a sluggish 2023. The second quarter of the year was encouraging, with $15.6 billion raised. However, Q3 was a tougher fundraising period, during which late-stage funding fell by more than 50% y-o-y. As noted by Crunchbase, early-stage funding to European start-ups declined 12% y-o-y. This hasn’t quelled appetite among VC managers, with a number of new fund launches in recent weeks including London-based Atomico, who raised $1.24 billion across two funds. On the growth side, Resurge Growth Partners recently launched a EUR120 million venture equity fund to back European and Israeli start-ups.

Total VC capital for 2024 is forecast to hit $18.8 billion and as was referenced in IPEM’s Weekly Spin, the European Union is taking measures to address the innovation gap between Europe and the US and China. The new initiative, dubbed the Trusted Investors Network, will see the EU partner with European venture capitalists to support technology investment, and help catalyze growth in deep tech companies. In total, some 71 investors with combined assets of EUR90 billion have signed up to the new initiative.

Sourcing the highest quality deals has become highly competitive, including Series A and Series B deals, as European VC firms look to deploy capital. And as was noted during the Venture & Growth Summit at IPEM Paris 2024, there are signs that Europe’s VC market is becoming more sophisticated, where deals are more downside protected. Investors are spending a lot more time on valuations, resulting in a longer time for deals to get to market. Later stage instruments like IPO warrants are being used, to realign valuations at the time of exit, as deal structures evolve.

Podcast - What is your perspective on the democratization of private equity - Website

Podcast – What is your perspective on the democratization of Private Equity?

INDUSTRY INSIGHTS, News

🚀 Private Equity is opening up! Should you jump in? Experts weigh the risks and rewards. The future of Private Equity is here! Hear what the experts think about democratization and what it means for you 🧠

Jean-Philippe Richaud: (03:11) “We see most of the institutional, and asset managers willing to address the mass market, and unité de compte in France, and life insurance, driving products for other countries.”

Boris Bakech: (10:01) “I think, it’s the course of history. It needs to happen. It has happened for the public markets. It will happen for the private markets.”

Jean-Philippe Boige: (14:50) “On the long run, it feels like it’s going to mark a revolution in financial inclusion! I mean, you’re opening a super asset class to everybody.”