Nassim Cherchali, Managing Partner at Anacap, joined Giovanni Amodeo for an engaging fireside chat. The discussion covered a wide range of topics, focusing on identifying opportunities in the financial sectors within the lower mid-market. Here are the key takeaways from their conversation:

1. Nassim Cherchali’s Background and Role at Anacap: Nassim shared his journey from growing up in France and moving to the UK, to his early career at Lehman Brothers. He detailed his transition to Anacap, highlighting his growth within the firm and his current role overseeing investment decisions and business growth.

2. Evolution of Financial Services: Nassim discussed the major cycles in financial services over the past 15 years, including the impact of the global financial crisis and subsequent regulatory changes. He emphasized the importance of digitization and demographic shifts, particularly in wealth management and health insurance sectors.

3. Investment Strategy and Market Opportunities: Anacap’s focus on the financial ecosystem, targeting services, tech, and software businesses rather than large banking or insurance firms. The importance of backing strong management teams and entrepreneurs who can execute their business models effectively.

4. Origination Process and Deal Flow: Nassim explained Anacap’s top-down approach to identifying investment opportunities, combining sectoral theses with strong entrepreneurial teams. The firm reviews around 150 deals annually, with a rigorous selection process to identify the most promising investments.

5. Technology and Market Trends: The role of technology in Anacap’s investment strategy, focusing on proven business models with minimal technology risk. Observations on the pace of digitization in financial services and the ongoing need for infrastructure development.

6. Future Outlook and Industry Trends: Predictions on the future of wealth management, emphasizing the hybrid model combining digital and personal advisory services. Insights into the consolidation trends driven by demographic changes and the need for smaller firms to keep up with digitization.

7. Regulatory Environment and Market Dynamics: The impact of regulatory frameworks on investment strategies, particularly the challenges of navigating different regulations across Europe. The importance of harmonization in regulatory standards to facilitate market growth.

8. Exit Strategies and Market Evolution: Anacap’s approach to exits, with a preference for selling to other private equity firms while keeping strategic exits as a potential outcome. The evolving landscape of private equity and the increasing role of secondary markets.

This fireside chat provided valuable insights into Anacap’s investment philosophy and the broader trends shaping the financial services sector. Nassim Cherchali’s expertise and strategic vision offer a compelling perspective on navigating the complexities of the lower mid-market.

Key Timestamps:

00:09 Introduction to the Fireside Chat
00:40 Nassim’s Background and Career Journey
02:06 Financial Services: Observations Over 15 Years
03:45 Opportunities for Smaller Funds in Financial Services
05:18 Origination Process: Identifying Opportunities
06:25 Technology Risk in Investments
07:19 Assessing Addressable Markets
08:16 Long-Term Views on Business Exits
09:43 Mapping the Market for Investment Opportunities
13:50 Current Themes in Financial Services
15:27 The Evolution of Digitization in Finance
16:58 Changing Consumer Behavior in Wealth Management
18:11 Future of Wealth Management Professionals
19:34 Impact of Fee Pressure on Wealth Management
20:31 Market Trends: Platform Deals vs. Buy and Build
21:26 Regulatory Landscape in Europe vs. US
22:11 Public Adoption of Financial Innovations