The Four Dynamics Shaping Global Private Markets

09/14/22 • 15 min

What are the most important dynamics shaping the global private markets industry today?
I would highlight four:

Primary fundraising is extremely challenging
Consolidation is transforming the strategic landscape
The difficult macro environment is necessitating novel liquidity solutions
Crypto is emerging as an institutional asset class

These four dynamics present urgent and existential risks to fund managers, and they demand immediate action.
This episode shares the Portico house view.

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Download the report The Four Dynamics Shaping Global Private Markets here.
Download the data-rich slides on the four dynamics here.
Download the Insider's Guide to Raising a Fund at www.porticoadvisers.com/pitchbook.
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Music credit: Daniel Allan, “Too Close” released on Sound. You can learn more about Daniel’s community-owned DAO that underwrote his latest EP here.
(Disclosure: In addition to the “Too Close” NFT, Portico’s founder Michael Casey owns $OVERSTIM tokens, as well as many other music NFTs; his Sound collector profile is available here).

What are the most important dynamics shaping the global private markets industry today?
I would highlight four:

Primary fundraising is extremely challenging
Consolidation is transforming the strategic landscape
The difficult macro environment is necessitating novel liquidity solutions
Crypto is emerging as an institutional asset class

These four dynamics present urgent and existential risks to fund managers, and they demand immediate action.
This episode shares the Portico house view.

Previous Episode

Ben Fanger on Distressed Debt in China

In today’s episode I speak with Ben Fanger, the Managing Partner and Founder of ShoreVest Partners, an investment firm that specializes in Chinese distressed debt and opportunistic credit.

Ben is a pioneer in China’s distressed debt markets, having worked on the country’s first non-performing loan (“NPL”), as well as the first foreign-invested NPL deal 20 years ago. Since then, he has managed roughly $2 billion in Chinese distressed debt and special situations investments — and as you’ll hear in this conversation, never lost money on an NPL.

I encourage you to have your pen and paper at hand because you are going to want to take notes — this conversation is both broad and deep.
In our discussion, Ben provides a clear overview of China’s credit markets — which are the second-largest in the world — and lays out the ways that foreign investors can access them, including the spaces where ShoreVest plays.

We discuss how the market has evolved over the last two decades. This includes the role of the country’s Asset Management Companies (“AMCs”) in the NPL market, the treatment of creditor rights, and his experience working through the Chinese legal & bankruptcy system to attain enforcements.

Ben shares why he thinks there are so few international investors in China’s distressed debt markets, the ways that ShoreVest exits its investments, and how the firm converts and repatriates exit proceeds to U.S. dollar investors.

We also get into developments with Evergrande and the country’s overleveraged property developers and the risks that keep Ben up at night — among other topics.

I hope you enjoy this conversation.

This podcast was recorded in July 2022.

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Learn more about ShoreVest Partners.

The World Economic Forum index on investor protections referenced in the discussion is available freely at this link.

PwC’s “The Chinese NPL market in 2020” report is available here.

Ben’s book recommendation: Dinny McMahon’s "The Great Wall of Debt".

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Mike's book recommendation on historical context:
Loren Brandt & Thomas Rawski, "China's Great Economic Transformation".
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Next Episode

Aleem Remtula on Investing in Refugees & Displaced Communities

In today’s episode, I speak with Aleem Remtula, a Partner on the private equity team at Developing World Markets.

DWM is an impact investing firm that has invested debt and equity in over 200 companies across 70 countries over the last two decades.

While this experience provides a broad canvas for discussion topics, the focus of my conversation with Aleem is DWM’s investments amongst refugees and displaced communities — a population that now exceeds 100 million people worldwide.

I’m passionate about this topic — and the dignity of displaced persons — for many reasons, including the fact that my maternal grandparents were refugees. By the end of this show, I hope that you will be, too.

In our discussion, Aleem shares some astonishing statistics and details that upend the conventional wisdom on what constitutes a displaced community.

He discusses the roles that investment can play in assisting these communities, the unique challenges they face with respect to financial inclusion, the role of gender equity in DWM’s Displaced Communities Fund, and much more.

Like me, some listeners may wonder whether investing in refugees might result in predatory lending to some of the world’s most vulnerable populations. Aleem addresses this question head-on and he enumerates the safeguards DWM employs to ensure that it’s a responsible investor. So, listen in for a very thoughtful conversation.

Aleem also provides some book recommendations — one of which I’ve already scooped up. You can find links to the books and other resources in the show notes.

With that, I hope you enjoy this episode. And if you do, please share it with friends and colleagues.

This podcast was recorded in September 2022.

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Learn more about Developing World Markets.

UNHCR: Global displacement hits another record, capping decade-long rising trend.

World Bank, Forcibly Displaced: Toward a Development Approach Supporting Refugees, the Internally Displaced, and Their Hosts

Aleem’s book recommendations:

· Christine Mahoney, Failure and Hope: Fighting for the Rights of the Forcibly Displaced

· Dina Nayeri, The Ungrateful Refugee: What Immigrants Never Tell You

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