Altamar Capital Partners’ first telematic Annual Investors’ Meeting brought together 1,400 participants from all over the world in two sessions
- More investors than ever followed the meeting this year, at which it was highlighted that all the funds performed excellently in 2019, breaking records in terms of fundraising and investment activity.
- One session of the meeting was held on June 10 in Spanish and another on June 16 in English (the Annual Review Meeting).
- The impact of the Covid-19 crisis on the various asset classes was analyzed and the extraordinary response of all the firm’s professionals in adapting to the new situation, ensuring business continuity, was underlined.
Altamar’s Annual Investors’ Meeting was held on June 10 in Spanish and on June 16 in English (the Annual Review Meeting). For the first time ever, attendance was telematic due to the health crisis caused by Covid-19. All speakers referred to this crisis and Claudio Aguirre, before beginning his speech, asked for a minute’s silence in memory of all the victims of the pandemic.
Close to 1,400 people registered in order to be able to follow the live transmissions of the two sessions. The speakers were Claudio Aguirre, José Luis Molina, Miguel Zurita, Marcel Rafart, Ignacio Antoñanzas, Fernando Olaso, Rodrigo Echenique and José María Fernández, who talked about the performance of the firm’s various funds and gave their views on the state of the markets for each asset class in the difficult situation in which we find ourselves.
Claudio Aguirre began his speech by mentioning the main achievements of the various businesses last year, stressing that all the funds had performed excellently, consolidating the returns generated by the various asset classes. Also, 2019 was a record year both in terms of fundraising, which exceeded €1.4 billion a year, and investments, with a total of €7.3 billion accumulated in terms of investor commitments, in primaries, secondaries and co-investments, with various strategies in several different regions (America, Europe and Asia-Pacific). The Chairman assured the meeting that “we will continue to invest prudently and according to our DNA which is capital preservation and the generation of Alpha with a very tight risk-return profile”.
He also underlined in his speech that human capital was the company’s most important asset. He said the company’s principles and values, the continual training of teams and the desire to encourage diversity and a leadership of proximity all shaped the firm’s “way of being” or “culture”, based on long-term relationships with clients, fund managers and employees.
Another of the most important aspects of Claudio Aguirre’s speech were the milestones reached as regards the company’s commitment to ESG strategy and responsible investment. With respect to sustainable and responsible investment, he said that “raising awareness both internally and externally is essential because it is the only way to create a sustainable investment industry”. He highlighted the clear improvement in the ESG commitments of all the GPs in which Altamar invests and reminded the meeting that a good part of the firm’s social responsibility is channelled through the Altamar Foundation, with over one hundred employees taking part this year in its initiatives in areas such as health and education.
In his speech Claudio Aguirre also referred to the “Fund of Funds Manager of the Year in Europe, Middle East and Africa (EMEA)” award obtained by the company in 2019. He said it was very special because it was awarded to the company by sector professionals. “We are very happy to have won this award” he said, “especially as it would not have been possible without the trust of our investors and clients or the hard work and dedication of the extraordinary team of people who make up the Altamar group. We wish to express our most sincere gratitude to all of them”.
The Chairman’s report also underscored the extraordinary effort made by all the Altamar team during these months of teleworking, and he expressed his satisfaction with the way they had adapted to this new situation. “Day after day they have demonstrated great ability, a huge commitment to serve our investors, leadership, pro-activeness, hard work and responsibility, in accordance with Altamar’s values and unique culture”.
The Chairman concluded by referring to the private assets market where investor appetite for this asset class and liquidity continue to grow. He said this required the firm, if possible, to be even more rigorous in its due diligence procedures and in maintaining access to the best fund managers to ensure good returns for investors: “our focus is on the future, and we aim to move forward firmly in step with investors in this difficult market scenario”. He was optimistic about Altamar’s ability to emerge even stronger from the crisis. “We have a great future ahead of us” he concluded.
José Luis Molina was the next to speak and he went over the positive performance of Altamar’s funds, highlighting the returns obtained at December 2019, and the level of distributions made to investors. He also analyzed the impact of Covid19 on portfolios and gave his view of what is happening in the markets during this crisis in comparison with what happened in the crisis of 2009. He presented an analysis of the impact of the cycle on the returns obtained on the investments of each vintage, which revealed the importance of diversification by vintage, asset class, strategy and region (an integral part of Altamar’s DNA), and the importance of not halting private asset investment programs during periods of crisis, which historically have produced much higher returns than the rest of the cycle. He also emphasized that the private asset market continues to grow as it has obvious competitive advantages which are especially relevant at times of difficulties and crisis: “This is patient and long-term capital, with a sound business model, and large financial capacity, offering a highly diversified model compared to traditional liquid assets, and one that shows a closer alignment of interests with investors”.
Subsequently, Miguel Zurita analyzed the buyouts market and the activity of Altamar Private Equity, in addition to the performance of its primary and secondary market funds, the impact of the Covid-19 crisis on their portfolios and the opportunities that exist for this market in the wake of the crisis. In 2019 Altamar Private Equity was very active, its investors paying in €296 million, generating a capital gain of €154 million and €98 million in distributions. Our most recent global primaries investment program is Altamar X, which closed at €750 million. Altamar Capital Partners’ fourth program dedicated exclusively to secondaries, ACP Secondaries 4, was initiated. The new fund has a target size of €750 million and will look for the best secondary market investment opportunities in Europe and the US, at an especially attractive time for the market as Miguel explained during his speech.
Marcel Rafart underlined the importance of prudence when assessing the impact so far of the public health and economic crisis caused by Covid-19 on the tech sector in general and on Galdana Ventures in particular. First, he highlighted the boost given to digitalisation by the pandemic and how this is good news for Galdana. Galdana’s universe of tech companies is comprised of close to 1,600 businesses that on average will invoice less in 2020 than their initial targets, but that will, however, exceed 2019 turnover.
With respect to Galdana Ventures’ vehicles, he said that in 2019 a third vehicle, Galdana II, was raised for €465 million with the same investment strategy as Galdana I, and which to date is invested in 45 underlying funds. Like Galdana I, this vehicle invests in a selection of the world’s best venture capital funds (50% US, 30% Asia and 20% Europe and Israel). Galdana I is €275 million in size and wrapped up its portfolio in 1Q18 with a total of 44 underlying funds. The fund’s J-curve was very short and it has already had 36 exits in the underlying portfolio of companies with very good results.
The infrastructure business was presented by Ignacio Antoñanzas, who said that its business models have lessened the impact of Covid-19 on the sector, as reflected in a very good performance by the assets as a whole, except for some transport and energy assets. He also said that activity remains strong and assets continue to be sold at good valuations so private capital’s appetite for and interest in infrastructure investments continues to grow. Turning to our funds, he highlighted that Altamar Infrastructure Income is performing as envisaged, being 102% committed, with over 190 underlying assets held through 27 investments. In February 2020 a 4.4% yield was distributed to investors for FY 2019. Altamar Infrastructure Income II FCR, launched in April 2019, has adopted the same strategy and investment policy as its predecessor, continues fundraising and is very close to its target size of €350 million. Currently, the fund is 34% committed, with 9 investments; 7 in the primary market, 1 in the secondary market and 1 co-investment. The fund is already highly diversified, both by country (more than 10) and sector (more than 10) in 40 underlying deals, and in only nine months has been able to generate cash, paying out a yield of 1.1% to investors in February 2020 for FY 2019.
Fernando Olaso analyzed the real estate sector and reviewed the performance of Altamar Real Estate’s funds. Although Covid-19 has had a significant impact on real estate, there are substantial differences among sectors. Altamar’s real estate funds have well positioned portfolios (high quality, moderate gearing, and cash flow with which to weather the current situation), although the unexpected impact on the hotel sector requires special attention and handling. As regards Altan I & II Global, he emphasized that this is a fund that is in the process of being wound down and that its remaining NAV represents 20% of the fund’s total value. Altan III Global is undergoing disinvestment, with 11% distributed in 2020 and a large pipeline of disinvestments. Finally, Altan IV Global, with €362 million in total assets, is currently 77% committed and has made 29 investments (18 in underlying funds in the primary market and 11 co-investments). The fund is 32% invested and has 68% pending investment, putting it in a favourable position to take advantage of opportunities arising after the Covid-19 crisis. Altan IV has a similar strategy to those of its predecessors.
The final speeches were given by representatives of the Private Debt business. First, Rodrigo Echenique analyzed the performance of Altamar Private Debt I which in 2019 practically completed building its portfolio with two new investments in direct lending funds for €43 million. Total investment is now €238.5 million, 84% in Direct Lending -in twelve funds and a co-investment- and 16% in Senior Loans -in five funds-. He also said that the Covid-19 crisis had required the fund to halt the disinvestment of Senior Loans and attend to its commitments with underlying funds, with a capital call to investors of €35 million. In 2019 the fund generated a return of 4.5% with a valuation of 1.04 times the capital paid in by investors.
José María Fernández said it was still too soon to assess the duration and extent of the crisis and its impact on the portfolio, but that the design of the fund, with a bias in favor of senior debt -9 out of every 10 positions-, the priority given to defensive positions and its significant diversification by term, sector and geography would help APD I weather the crisis. He also stressed that this crisis would be a source of opportunities too. Some €105 million of the fund have yet to be invested in new direct loans, which will be structured under comparatively more favorable conditions for the lender given existing demand for funding and the shift in the balance of power in the market in favor of creditors.
After the speeches, Pilar Junco chaired a question and answer session which brought to an end these unusual Annual Investors’ Meeting sessions.