InvestmentEurope has caught up with Banque Profil de Gestion’s associate director Fiorenzo Manganiello, who discusses his views on private equity investments and blockchain.
Manganiello (pictured) outlines the opportunities arising from private equity investments as an asset class. “In the current macroeconomic environment, still characterised by a low interest rates environment, investors are struggling to generate returns within the equity and debt capital markets.
Private equity can provide higher returns than those asset classes as well as lower correlation to the public market. However, investors should carefully analyse the funds ‘performance metrics and take into account the illiquidity risk.”
The private equity specialist highlights the growing demand he sees in private equity investments, in which there is still room for growth. “Capital invested in the private equity space has been raising during the past few years, with large family offices and UHNWI increasing their demand in the asset class. There is still potential for growth since it still represents a small proportion of the market when compared with public markets.”
Manganiello believes that one of the key points of investing in private equity is – in comparison with public equity – its active investment approach. “The active involvement and the operational expertise needed offers the promise of higher returns in relation to other sort of investments more passive.”
However, Manganiello notes that there are some high barriers to enter the private equity space for entrepreneurs and UHNWI, arising from the big amount of paperwork required. In addition, GPs seem to be more comfortable dealing with institutional investors since they are able to better manage the workload.
And it is in that context where, according to Manganiello, blockchain can play a key role, since it represents an excellent opportunity to democratise the asset class while making more effective those time consuming operations.
“As an example, sharing data, signing contracts, and managing transactions will be more efficient and transparent with the use of blockchain, “ concludes Manganiello.