Speaker 1: This is Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Radio. All right, so let's talk a
Speaker 1: little bit about the world of private equity. It's always
Speaker 1: fun to catch up with this next guest this time
Speaker 1: of year because it's around the time that he puts
Speaker 1: out his big, bold predictions, his outrageous predictions for private
Speaker 1: equity for the coming year. We're talking about Antandrian, chairman
Speaker 1: of Triago. He's here with us in our Bloomberg Interactor
Speaker 1: Broker studio. He says he's based in Paris, but he's
Speaker 1: really a global citizen all over the world on a
Speaker 1: plane or something everywhere in Berlin due buy all of
Speaker 1: these different places, because this is the global industry, to
Speaker 1: say the least. Great to see you, thank you, Happy
Speaker 1: New Year. Related, um, so talk to us about some
Speaker 1: of these predictions. My favorite actually is the first one.
Speaker 1: Uh and I'll tell you why, because it's Blackstone raises
Speaker 1: billion dollars in a month. And you know, Carol and
Speaker 1: I have a joke because we spent all that time
Speaker 1: with Steve Schwartzman. One of the things he likes to
Speaker 1: do is say go big, and why wouldn't they raise.
Speaker 1: It's not the craziest idea. It may be crazy for
Speaker 1: the next year, I mean for this year, but I
Speaker 1: mean I guess that in the next years this is
Speaker 1: going to happen. And this actually may not. It may
Speaker 1: not need a month, it may need a minute. Uh.
Speaker 1: The reason why is that private equity is obviously interesting
Speaker 1: too many now, including the retail market, and uh, as
Speaker 1: you know, the SEC will be putting out some new
Speaker 1: rules that basically allow the public, maybe not all of
Speaker 1: the public, but a lot of it, to actually invest
Speaker 1: in private equity funds. And that's a reason to go
Speaker 1: I guess that's another reason to go big. One of
Speaker 1: the other things you point out, and this is a
Speaker 1: this is one very close to something we talked about
Speaker 1: a lot is soft Bank. Uh. And the Vision Fund
Speaker 1: and how when we're you know, sort of getting more
Speaker 1: into the world of venture capital here momentarily but a
Speaker 1: moment but uh, you know, you have a bold, outrageous
Speaker 1: prediction that they'll raise a hundred fifty billion dollars. I mean,
Speaker 1: they've raised huge amounts of money uh so far. I
Speaker 1: mean the first Vision Fund was a hundred billion. Indeed,
Speaker 1: it was actually the largest and it's still I guess
Speaker 1: the largest fund out there, and a hundred and fifty
Speaker 1: billion would obviously be the new largest fund out there.
Speaker 1: It's actually four times the number two funds fund. I
Speaker 1: think it's twenty six. So yes, they already have a
Speaker 1: lot of money, and they should have more. I love though,
Speaker 1: as a caveat to this is I mean a lot
Speaker 1: of that money comes what specifically from state connected entities
Speaker 1: in China. Correct, Yes, there's a nice little circle there. Yes, indeed, indeed,
Speaker 1: and then that's uh, you know, that's because of what's
Speaker 1: going on in this world. I mean, China is obviously
Speaker 1: taking a big piece of the of the action. And
Speaker 1: I guess they want to put money into private equity
Speaker 1: every air They've been buying Africa basically through private equity
Speaker 1: and and other other areas. So I mean, yes, yes, yes.
Speaker 1: You also talk a little bit about c p p
Speaker 1: i B, the Canada Pension Plan Investment Board, one of
Speaker 1: the most admired I think investors out there. They really
Speaker 1: pioneered in many ways, along with some of the other
Speaker 1: Canadian pensions, this direct investment model, and I think you
Speaker 1: and I have talked about that over the years. What's
Speaker 1: the what's the sort of outrageous prediction there, and what's
Speaker 1: underneath it? The prediction is that they will put out
Speaker 1: a fifty year fund. Many people in this space feel that,
Speaker 1: you know, investing for five years or ten years is
Speaker 1: not enough, and that if you find a good investment
Speaker 1: you should keep it. Uh and some other people, you know, pensioneers,
Speaker 1: feel that if if they can put their money at
Speaker 1: ten percent a year forever, that's obvious be good. Hence
Speaker 1: this prediction not so outrageous. Actually so okay, I find
Speaker 1: this little outrageous. Warren Buffett's Berkshire Hathaway say launching a
Speaker 1: private equity division. I had to remind myself. I knew
Speaker 1: he had made some comments that were critical of PE.
Speaker 1: I just had to remember. But in the past he
Speaker 1: has said, specifically, we have seen a number of proposals
Speaker 1: from private equity funds where the returns are really not calculated,
Speaker 1: a matter that I would regard as honest. If I
Speaker 1: were running a PENCHEON found it would be very careful
Speaker 1: about what was being offered to me. So is he
Speaker 1: saying I'm going to do a private If he does this,
Speaker 1: he's going to say I can do a private equity
Speaker 1: fund that is more transparent and better than the ones
Speaker 1: that are existing. I mean, this is kind of interesting
Speaker 1: to this, you know thought. I think what he's doing
Speaker 1: is already private equity, right, he is already buying control
Speaker 1: positions in companies that need, you know, something, and this
Speaker 1: is what people are doing. So here, the prediction is
Speaker 1: that he would change, you know, the format of of
Speaker 1: this fund, but that's it. I mean that, I guess
Speaker 1: the business itself would would basically be the same. So wait, wait,
Speaker 1: so would this be a fun that others can then
Speaker 1: tap into? I guess so yeah, sure, yeah, well and
Speaker 1: open to others yea. And look, I mean he's partnered
Speaker 1: with three g I mean he's gotten into the private
Speaker 1: equity business at least from an arm's length perspective. One
Speaker 1: more outrageous and then we're gonna take a break and
Speaker 1: come back. Chuck Schwab buys KKR. I love this one.
Speaker 1: Chuck being Henry Kravis's boss, I don't quite see it,
Speaker 1: but go on. Well, I'm not sure this is the
Speaker 1: main idea. The main idea is that may you know,
Speaker 1: main mainstream asset managers want to become big also in
Speaker 1: private equity, and that the best way to get there
Speaker 1: quickly is to buy something that's there, and some buy
Speaker 1: something that's big. So that's that's the reason you're listening
Speaker 1: to Bloomberg Business Week Carol Masser along with Jason Kelly.
Speaker 1: Our guest at this hour Antoine Drean, chairman of Triago.
Speaker 1: M Antoine, I feel like I did doesn't go by,
Speaker 1: We doesn't go by where there is certainly some concern
Speaker 1: about the growing power of the private markets in which
Speaker 1: private equity plays. Um. What does the private equity industry,
Speaker 1: what what's on their mind? What do they need to
Speaker 1: be concerned about in regards maybe future legislation or regulation.
Speaker 1: There's going to be more regulation because there's going to
Speaker 1: be more people involved and and and more uh, you know,
Speaker 1: more of the retail side. So there is going to
Speaker 1: be more. There's already a lot actually, and I think
Speaker 1: this is an industry where LPs play a big role.
Speaker 1: LPs are I mean investors in this asset class, are
Speaker 1: you know, big pension funds or other institutions of the
Speaker 1: same type. And they they come with their own regulation
Speaker 1: and it's actually quite tough, um, and they're and they're
Speaker 1: upping the pressure. It sounds like right. I mean they're
Speaker 1: demanding more transparency around fees, around the ultimate investments that
Speaker 1: funds make, right Yeah, I mean they want to understand
Speaker 1: what their money is is used for and uh and
Speaker 1: where they invest, etcetera. Just to make sure that they
Speaker 1: can you know, invest with the same groups over and over. Um.
Speaker 1: So yes, they are doing that. So in terms of
Speaker 1: anything new that might come down, how do you see it?
Speaker 1: What what specifically might come down as more regulation on
Speaker 1: the industry, more transparency for sure. Um what does that mean,
Speaker 1: like in terms of reporting or like what? Yeah, more
Speaker 1: more more reporting, more more thought behind valuations. Uh, it's
Speaker 1: already much much better than ten fifteen years ago. You know,
Speaker 1: ten fifteen years ago you had different prices for the
Speaker 1: same asset, but at the same time in different reports.
Speaker 1: Today you pretty much have the same number for one
Speaker 1: main reason, and it's called the secondary market. Uh if
Speaker 1: if if a fun trades on the market and the
Speaker 1: discount is huge compared to others because marks are uh
Speaker 1: you know, way up there. That's one reason. That's that's
Speaker 1: one reason to to look very closely at your numbers.
Speaker 1: And what about the political side. I mean we are
Speaker 1: in a in a US presidential election year, we've had
Speaker 1: Elizabeth Warren and others come out and call out private
Speaker 1: equity specifically and by name. You know, she's talked about Blackstone,
Speaker 1: uh and others. How seriously are the private equity managers
Speaker 1: taking that? How seriously should they take it? In US?
Speaker 1: I think they are. I've read word scapegoat somewhere today. Um,
Speaker 1: I think they have to be aware that this is coming.
Speaker 1: We had that in Europe already a few years ago,
Speaker 1: so I mean, as as a European, I know what
Speaker 1: it means. Um I did it change behavior in Europe?
Speaker 1: I think it changed the way that private equity players
Speaker 1: were describing and themselves and and their language, and and
Speaker 1: they put a lot of you know, they put a
Speaker 1: lot of work into showing the people how many jobs
Speaker 1: they were creating, what value they were bringing to the
Speaker 1: mark it, etcetera. So there were there were going they
Speaker 1: were doing a good job in in showing people that
Speaker 1: they were not bad. Right. Well, I think that's what's
Speaker 1: hard about private equity the industry. Right, there's contrasts. I mean,
Speaker 1: I think there's that side where they make investments that
Speaker 1: other folks would not even touch, certainly not the traditional
Speaker 1: banking world or financial world or even you know, the
Speaker 1: public market. So there's that service and then there's the
Speaker 1: other that feels like buy a property, clean it out,
Speaker 1: get rid of all the costs, sell it, make a profit,
Speaker 1: move on. So you know, there's that message that and
Speaker 1: maybe a little bit there is a little bit of
Speaker 1: both of that going on. Well, at the end of
Speaker 1: the day, I think that private equity has indeed created
Speaker 1: a lot of jobs and a lot of value. And
Speaker 1: I think many studies showed that there are obviously a
Speaker 1: few counter examples of private equity shops that didn't behave
Speaker 1: very well. But if you look at it deeply, I
Speaker 1: mean it's really a small number of firms and people.
Speaker 1: The vast majority are doing a great job in providing
Speaker 1: again value too to their investors and uh and and
Speaker 1: two companies their their owning. And yet, you know, going
Speaker 1: back to something you said, they do have a public
Speaker 1: relations problem to to a large extent, because Elizabeth Warren
Speaker 1: can catch a lot of attention. And maybe it's the
Speaker 1: power of the language and the power of the rhetoric,
Speaker 1: but the narrative does you know, this goes back to
Speaker 1: a previous presidential election where admit Romney, you know, suffered
Speaker 1: pretty mightily and it may have lost the election, you know,
Speaker 1: owing to that association. I I think that they all
Speaker 1: have to make sure that their communication is getting better
Speaker 1: and that they actually tell people what they're doing and
Speaker 1: people will understand that this is this is okay, right right, Well,
Speaker 1: it'll be interesting to see too if private equity can
Speaker 1: get ahead and be a part of at least this movement.
Speaker 1: It feels like to companies and investors acting in a
Speaker 1: much more holistic way, right, you know, and just thinking
Speaker 1: about uh the end. Investor Antoine Dround always a treat
Speaker 1: to catch up with you, Chairman of Triago. You can
Speaker 1: check out online his outrageous predictions for private ecuty and
Speaker 1: so I'm not so outrageous. So outrageous and they tend
Speaker 1: to come at least partially true, some of them. So
Speaker 1: check that out. Always grateful to him for stopping by
Speaker 1: amid his world travel