“Bloomberg: Outlook Depends on Which Trump Administration Shows Up” by Ainslie Chandler featuring Eric Zoller
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As the new year begins, Bloomberg Briefs spoke to investors, general partners and intermediaries about what happened in 2016 and what to expect in the year ahead.
Eric Zoller, founder and partner, Sixpoint Partners. Sixpoint is a U.S. and Hong Kong-based placement agency and advisory firm. The firm focuses on funds between $200 million and $2 billion in size.
Q: What is the biggest theme of 2016?
A: Some years are full of exits or volatility but I think people are going to look back at 2016 and say it was a pivot year, as compared to the prior five years. Deal volume was down, the number of deals were down relative to 2015 and I think overall fundraising will be flat to down or only mildly up. The reasons for it are that there was some volatility early in the year, the IPO market almost completely shut at one point, so that limited the amount of exits. Valuations have reached a peak, so that has been a driver of deals slowing. The lack of exits its causing a lack of distributions back to investors, which affects the amount of money being recycled back into the market. The other driver has been the uncertainty surrounding the election, which we are now getting some clarity on. So as we head into 2017, it will be a very different environment.
Q: What is your outlook for 2017?
A: It depends on which Trump administration shows up. But I think we are going to see increased growth, a better regulatory environment and an improved interest rate environment. But I don’t think the impact of that will flow through to the market for a couple of years. I don’t know that everyone is going to act on those changes unless those changes are going to be made on a bipartisan basis.
Q: What is your surprise prediction for 2017?
A: We are going to see a lot of spinouts and succession stories. There’s been a lot of new types of capital solutions offered into the market, groups like the Dyals of the world. I think that private equity seeding is something a lot more people are talking about. There is a lot more flexible capital in the market because of the amount of capital creation that has taken place in the past few years.
Q: What is the most interesting new fund type or strategy you have seen in the market in 2016?
A: There has been a lot more discussion around longer-term and permanent capital. Permanent capital has always been the holy grail of the private equity market. There’s not an explosion but definitely an appetite for longer-term capital on the part of LPs.
Sixpoint Partners, LLC, is a registered broker/dealer, member FINRA (http://www.finra.org) and SIPC (http://www.sipc.org). Sixpoint Partners Asia Limited is licensed by the Securities and Futures Commission (http://www.sfc.hk).