In a recent fireside chat, Laurent Mignon, the Group CEO of Wendel, discussed the evolution of private equity as an asset class. The conversation covered a range of topics, including Mignon’s background, the future of private equity, and the importance of Environmental, Social, and Governance (ESG) targets in investment strategies.

Mignon, who has previously served as the CEO of a large French bank, BPCE Group, and the investment bank Natixis, shared his insights on the changing landscape of asset management. He highlighted the shift of interest towards private assets, which have seen significant growth since the 2008 financial crisis. However, he also noted the challenges facing the industry, such as succession issues and the difficulty of raising funds in the current economic climate.

Mignon believes that the private equity industry is entering a phase of consolidation, driven by the need for sustainable relationships with limited partners (LPs) and the desire for multi-asset class firms. He also sees potential for the industry to move towards wealth management and retailisation, although this requires careful consideration of the products offered to clients.

On the topic of ESG targets, Mignon revealed that 16.9% of Wendel’s compensation incentivization is linked to ESG targets. He believes that ESG criteria will continue to be at the heart of investment policies, and that investing in ESG-aware companies can generate superior returns.

In terms of future acquisitions, Mignon indicated that Wendel is interested in different asset classes, including debt, infrastructure, and secondary businesses. However, any potential acquisitions would need to align with Wendel’s culture and long-term strategy.

Overall, Mignon’s fireside chat provided valuable insights into the current state and future direction of the private equity industry. His emphasis on sustainable growth, ESG targets, and the importance of cultural fit in acquisitions highlight key trends that are likely to shape the industry in the coming years.

Key timestamps:

00:09: Introduction to ION Fireside Chats
01:14: Laurent Mignon’s Background
03:14: The Evolution of Private Equity
04:28: Growth of Private Asset Class
05:25: Challenges and Consolidation
06:37: Significant Consolidation Predicted
07:27: Consolidation and Strategies
08:50: Multi-Class Asset Organizations
10:17: Permanent Capital and Strategic Thinking
11:07: LP Expectations and Relationships
11:45: Expectations of LPs
13:10: Retailization of the Business
14:28: Democratization of Private Assets
16:51: ESG Targets and Incentivization
18:59: Succession Issues and Firm Attractiveness
20:57: Discussion of Deals and Rationale
22:35: Cultural Fit in Mergers
23:32: Transaction Structure and Alignment of Interest
24:33: Expanding to Different Asset Classes
25:14: Impact of Interest Rates on Asset Classes
27:15: Unique Selling Proposition to CEOs