16 episodes

Join Winna Brown, EY Private Equity Partner and Americas FAAS Leader, as she explores the emergence of NextWave Private Equity and its impact on the economy and society, capturing insights from industry thought leaders and PE practitioners from across the globe.

NextWave Private Equity challenges us to think holistically about the aspiration of the PE industry: a future that is inspired by purpose and transparency, focused on digital transformation, fueled by value creation and driven by an innovative and diverse workforce.

NextWave Private Equity Winna Brown, EY

    • Investing
    • 5.0 • 27 Ratings

Join Winna Brown, EY Private Equity Partner and Americas FAAS Leader, as she explores the emergence of NextWave Private Equity and its impact on the economy and society, capturing insights from industry thought leaders and PE practitioners from across the globe.

NextWave Private Equity challenges us to think holistically about the aspiration of the PE industry: a future that is inspired by purpose and transparency, focused on digital transformation, fueled by value creation and driven by an innovative and diverse workforce.

    What private equity needs to know about investing in APAC: Part II

    What private equity needs to know about investing in APAC: Part II

    In this episode of the NextWave Private Equity Podcast, Josh Lewsey, EY-Parthenon Strategy & Transactions Partner, and John Levack, Vice Chairman, Hong Kong Venture Capital and Private Equity Association, join Winna Brown to help private equity investors understand how new regulations will impact the current and future private equity ecosystem in APAC.
    Visit ey.com to read our latest private equity perspectives.
    The global trade environment has increased geopolitical uncertainty, making forecasting difficult. The Organisation for Economic Co-operation and Development (OECD) is predicting 2020 will see a 4% global contraction in GDP with only one G20 country having a positive GDP: China.
    It is possible that a bifurcation between US/Europe and Asia of both markets and products will occur as a result of politics rather than consumer requirements. This combined with the region’s growth potential and faster post-pandemic recovery can potentially result in Asia as a more promising market in which to deploy private capital.
    Hong Kong is the biggest cross-border center for private equity (PE) in Asia. While the National Securities Law in Hong Kong has caused significant discussion, the impact on Hong Kong-based PE firms has been nominal: this is because China is already a major investment market for these firms and anyone investing in China is already subject to the Chinese national security law, which is quite similar. 
    The Hong Kong Government recently passed the following three landmark laws that solidify Hong Kong as an ideal base for private equity operations:
    Unified Fund Exemption Regime: extends the profits tax exemption to all funds, whether or not the fund's central management and control is exercised in Hong Kong. New Limited Partnership Fund Law: allows a limited partnership to be set up in Hong Kong so a PE fund vehicle can be based there. New concessionary tax rate on carried interest starting in 2020. Over the next three to five years, PE in Asia-Pacific (APAC) will see:
    Fee pressures and low yields in developed markets will push more capital allocation to APAC. Funds that drive sustainable returns through operational value creation and prioritize ESG will emerge as market leaders. Bifurcation of funds into financial conglomerates and small specialist funds. Minority stakes in local SME companies coming to market as new generations explore exit opportunities. An influx of capital from pension (defined contribution) investors will increase dry powder and exacerbate the challenge of deploying it successfully and responsibly.

    • 19 min
    What private equity needs to know about investing in APAC: Part I

    What private equity needs to know about investing in APAC: Part I

    In this episode of the NextWave Private Equity Podcast, Josh Lewsey, EY-Parthenon Strategy & Transactions Partner, and John Levack, Vice Chairman, Hong Kong Venture Capital and Private Equity Association, join Winna Brown to help private equity investors understand how to navigate and set expectations in APAC.
    Visit ey.com to read our latest private equity perspectives.
    It’s an exciting time for private equity (PE) in Asia-Pacific (APAC). According to Preqin, AUM for buyout funds focused on Asia have more than quadrupled over the last 10 years and firms now have more than USD $260b in AUM. They also have almost US$100b in dry powder available for deals. Taking a larger view, when we include some of the other private capital asset classes such as growth capital, venture, and infrastructure, PE firms focused on Asia have US$1.6t in AUM.
    With 4.3 billion people and a blossoming middle class, the positive growth we are seeing in APAC is a contrast to slowdowns in the US and Europe. As a result, PE investors are eager to put capital to work in the region using the LBO strategies and playbooks that have proven successful in the US and Europe. This can be problematic for several reasons:
    Because the region is dominated by small and mid-size enterprises (SME), 70%-80% of PE deals are minority investments. PE is often in an influential (not controlling) position, with limited ability to dictate changes in management. It’s difficult to find and execute a viable LBO deal due to a cultural perceptions that associate selling a business with a failure of its management. APAC is a fragmented market with multiple languages, cultures, legal jurisdictions and working customs. The region has not always been open to foreign capital, and while this is changing, legal and regulatory requirements in a fragmented market demand local expertise. Six ways PE investors can adapt to APAC:
    Choose businesses with capable, collaborative management in addition to competitive advantage and growth potential. Realize your ability to use leverage is dramatically reduced. Prepare to influence and support rather than dictate by demonstrating how your expertise and operational value creation is accretive to the business. Consider walking away from attractive deals in which PE and management are fundamentally misaligned. Avoid an ethnocentric, “colonial” approach: instead, lead with empathy and confidence in local talent. Present operational value creation and ESG as positive value accretion methods that improve the quality of a business.

    • 27 min
    Why PE should remain bullish on healthcare deals

    Why PE should remain bullish on healthcare deals

    In this episode of the NextWave Private Equity Podcast, Jeff Woods, EY-Parthenon US Co-Head of Healthcare, joins Winna Brown to explain why PE should remain optimistic about investing in the healthcare sector despite the short-term detriment of COVID-19.
    Visit ey.com to read our latest private equity perspectives.
    The assumption that the healthcare sector is “recession proof” has been debunked as the pandemic usurped traditional assumptions among both patients and investors. Now, there is heightened awareness of how patients access (or don’t access) the healthcare system after utilization plunged nearly 20%. According to EY-Parthenon research, 10% of Americans have decided not to access the healthcare system for the rest of 2020 or until a viable vaccine is available.
    Despite the short-term impact of the pandemic, PE investors have been encouraged by recent return to volumes and are more optimistic now than they were in the spring.
    The US payer mix is unique in a global landscape of government-sponsored healthcare systems. While there has not been a strong shift in favor of universal healthcare in the US, there has been a secular shift in healthcare expenditure from commercial to government that has accelerated due to rising unemployment caused by the pandemic. While the US healthcare market is ripe for efficiency gains, private equity (PE) can drive innovation in any healthcare market, regardless of the payer mix.
    Shifting patient behaviors and preferences are accelerating experience-led transformation and inspiring an increasingly patient-centric approach, creating opportunities for PE to drive innovation and improve patient experiences.  
    The healthcare/technology deal environment continues to be very active. The pandemic has impacted the deal lifecycle in several ways, including valuations and timeline to exit. In addition, PE has looked to deploy digital across the portfolio to address access, engagement, navigation, care transitions, cost management and staffing.
    Summary of the PE/healthcare landscape over the next three to five years:
    Deal landscape remains very strong and is expected to recover to pre-COVID levels 2020 deal volume will be down 15-20% from 2019 but the worst is over Providers will be the largest deal category and healthcare/technology deals will be the second largest Private capital remains the fastest way to innovate The healthcare sector will no longer be thought of as “recession proof”

    • 29 min
    Why PE must embed geostrategy to win in the market

    Why PE must embed geostrategy to win in the market

    In this episode, Jon Shames, Senior Partner and Leader of the EY Geostrategic Business Group, joins Winna Brown to explore why PE must embed geostrategy in both deal lifecycle and organizational culture to recognize unique opportunities and drive investment decisions.
    Visit ey.com to read our latest private equity perspectives.
    The geopolitical landscape is shaped by four disruptive forces: globalization, technology, demographics and the environment. Private equity firms need geostrategy to manage a shifting political environment with the objective of finding opportunity amid geopolitical risk. It is necessary to develop a culture in which these considerations are explored, resourced and incorporated into all steps of deal flow, ESG and LP relationships.
    A geostrategy is a powerful way for private equity firms to differentiate themselves and win in the market. Some PE funds have a more sophisticated and proactive approach to geostrategy while others are more reactive and ad-hoc: whatever the chosen approach, there is ample room for PE to further embed geostrategy into investment committee decisions.
    Geopolitics shouldn’t just be about risk and worrying about the downside: it should be about driving the investment strategy from a proactive, informed perspective that yields unique opportunities that may not have otherwise been considered. It’s also about making sure a deal makes sense given the complexity of risk in the current geopolitical and broader ESG environment. 
    A successful geostrategic framework should follow:
    Scan: establish and maintain the ability to identify, monitor and assess political risk. Focus: evaluate the impact on key performance indicators, mapping the political environment to the company footprint. Act: develop a portfolio of robust geopolitical risk management instruments and build a growth-oriented geostrategy. Five key geostrategic practices PE executives can adopt:
    Political risk is here to stay and is increasingly more complex. Firms need to refine their philosophical and organizational perspective. PE firms must embed geostrategy into every stage of the deal lifecycle from origination to exit. Consider developing a geostrategic center of excellence (COE) that empowers executives to move beyond risk identification to opportunity assessment. Geostrategy is more than a “check the box” compliance exercise: it should be integral to a firm’s investment decision process, incorporated into ESG and culturally valued.

    • 24 min
    How customer experience is driving digital transformation in PE

    How customer experience is driving digital transformation in PE

    Sean Epstein, Senior Vice President and Global Head of SAP Private Equity & Mergers and Acquisition Programs, and Marc Noë, a Managing Director in the EY Digital practice, join Winna Brown to discuss how customer experience is driving digital transformation in private equity.
    Visit ey.com to read our latest private equity perspectives.
    “Digital” drives enhanced experiences for customers. And while many people talk about digital in terms of technologies, the most important (and difficult) aspect of digital is adopting new ways of working in areas such as product orientation, design thinking and customer experience.
    Finding the right technology fit across the PE portfolio can be daunting, but the pandemic is inspiring PE firms to question the more fundamental processes of buying, making and selling:
    How can digital help us identify synergies in procurement across the portfolio so we can leverage our aggregate buying power to drive cost reductions? How can digital help us reimagine our sourcing and manufacturing so we can continue making products with fewer workers? How can digital better connect us with the experiences, desires and needs of our customers in a post-pandemic shopping environment? What are my peers doing that is driving superior performance and which digital technologies, investments and best practices will help me get there? Experience-led transformation impacts PE-backed companies from three key perspectives:
    Customer: customer experience and feedback changes business fundamentals and KPIs by informing how a company innovates, develops, markets and sells its products. Employee: employee experience and feedback surfaces valuable business learnings about what is working and not working “on the ground." Firm: scalable customer and employee feedback loops and the resulting KPIs serve as an ongoing barometer throughout the business lifecycle that is especially illuminative and relevant during due diligence. Top tips for PE-backed companies that want to enhance their customer experience include:  
    Rather than ask, “what do we need to do to digitalize our business?” ask, “what do we need to do to make us easier to do business with?” Launch and learn, speed is of the essence. You may fail but you will learn from the experience. CIOs need a seat at the table alongside all the other business leaders. It’s hard to attract and retain top talent, so don’t “sleep” on your talent.

    • 25 min
    Why PE’s role in our economy and society is more important than ever

    Why PE’s role in our economy and society is more important than ever

    Andres Saenz, EY Global Private Equity Leader, shares his observations regarding the evolution of private equity and the role it will play in a post-COVID world.
    Visit ey.com to read our latest private equity perspectives.
    The initial impact of COVID-19 on the private equity complex echoed what was seen in businesses across all sectors, with workplace safety, remote ways of working, investor and employee communication, liquidity and supply chain being top of mind to triage. In addition, deal markets (with the exception of credit funds) practically shut down overnight.
    PE firms are well-positioned for an economic downturn and have been preparing for this type of event in recent years. With over US$750b in dry powder in what is now a favorable buyer’s market, PE is looking to be as active as possible, as soon as possible.
    A few impediments to deals have included the inability to travel, a lack of available financing, and valuation disconnect between buyers and sellers in pricing assets. Despite these challenges, firms have become creative around investments in public equities as well as credit opportunities. Barring a resurgence of COVID-19, we anticipate buyers and sellers to converge sooner on valuations and in addition to pursuing opportunities in corporate carve-outs.
    PE-backed companies have a real advantage in this volatile environment: not only do funds have greater access to capital, they also have a mix of operating resources, expertise and advisor relationships ready to deploy across the portfolio.
    As PE navigates through COVID-19 and prepares for a momentous shift, a few trends will accelerate, including:
    Investing up and down the capital stack Defining digital transformation and enablement Refining their value proposition to attract incoming talent Hiring talent with the right skill sets Elevation of D&I and a broader focus on social responsibility Widening the aperture and representation of stakeholders Pivoting strategy towards long-term value

    • 23 min

Customer Reviews

5.0 out of 5
27 Ratings

27 Ratings

EY FAAS ,

EY FAAS

Super helpful podcast with great insights from industry leaders!! Highly recommend for anyone interested in learning more about PE

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Insightful!

An insightful podcast from industry leaders. Highly recommend!

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