Interview with Matthias Reicherter, Golding Capital

What investment strategies are likely to dominate in 2021? What sectors are likely to be most attractive?

My belief is that the alternative investment side, where we are part of the private equity, private debt and infrastructure investment sectors, will benefit from the crisis. The volatility is so severe on the public markets side, that institutions are shifting allocations towards the private markets.

I can see longer dated funds and longer holds in private equity. Rolling an asset into another vehicle and having another five years of managing that asset, people are happy to keep their exposure to various asset classes for longer.

How do you view the level of competition for deals in the market and how is this affecting valuations?

There is a move towards more complex and more greenfield deals to earlier in the investment’s lifecycle. There are interesting return profiles when you pay for complexity and bring it to clarity. You need to avoid the brutal competition for plain vanilla deals.

Investors are reallocating from the traditional to the alternative. The secondary market is going through the roof with people buying into portfolio exposure and building out that exposure across sectors.

How do you see the relationship between GPs and LPs in 2020 and how is this likely to change in 2021?

We have reported to and communicated intensively with our LPs. At the beginning of the Covid outbreak we communicated what it meant for the portfolio or what it could mean for the portfolio. There was a continuous flow of information and more intense than normal years.

What effect has Covid had on fundraising?

Our job is to find new opportunities and new fund managers and this is challenging as you don’t want to write a EUR 50m cheque without having seen each other. That is another Covid theme. A virtual meeting is a good way of doing a lot, but it needs to be somehow supported by a physical meeting as well.

What is the ongoing impact of Brexit on investment strategies and where funds are domiciled?

The UK is still a very important market. The number of players in the UK market is significant so if you are building a European private equity, private debt or infrastructure portfolio, you can’t ignore the UK.