Altamar holds its Annual Investor Meeting virtually in a year of excellent fund performance
- The firm starts a new phase together with CAM Alternatives that looks very attractive. Claudio Aguirre and Rolf Wickenkamp explained the reasons that have led the two companies to combine their businesses.
- The year 2020 closed with almost than €7 billion in underlying funds and more than €1 billion of additional investor commitments were raised.
- Henry McVey, Partner and Head of Global Macro at KKR, analysed the impact of the post-pandemic situation on public and private markets and its influence on the construction of investment portfolios.
Altamar’s Annual Investor Meeting was held on June 9, broadcast online for the second consecutive year. Although the impact of the COVID-19 crisis was very present, the focus was on the optimism and hope generated by the vaccination campaign and our combined efforts as a society. Nevertheless, 2021 still poses big challenges in the form of the ongoing global commitment to sustainability or the accelerated digitalisation process we are experiencing.
About a thousand people registered for the online meeting and were able to follow the speeches by Claudio Aguirre, José Luis Molina, Rocío Fernández, Marcel Rafart, Miguel Zurita, Fernando Olaso, Ignacio Antoñanzas, Pilar Junco, Antonio Guinea, Antonio Villalba and Enrique Sánchez-Rey. José María Fernández and Rodrigo Echenique closed the day.
Other guest that participated in the session included Rolf Wickenkamp, who held a discussion with Claudio Aguirre in which they presented their shared vision following the agreement reached with CAM for the creation of Altamar CAM Partners, and Henry McVey, who spoke with José Luis Molina about the evolution of the macro environment and private markets in the new post-pandemic situation.
Claudio Aguirre began his speech by remembering the people and institutions that have been hardest hit by the COVID-19 crisis and stressed that thanks to vaccines and the joint efforts of society we are in a much more optimistic position than one year ago. He gave a brief overview of the effects of the pandemic on the private equity industry, such as the drop in fundraising, which fell 19% below the records set in 2019. He also referred to the growth of the market in recent years, driven mainly by private equity, and the increase in the number of firms operating in private assets. He pointed out that private equity has been the best performing asset since 2006 and this year again it outperformed all asset classes.
Regarding the firm’s activity, Claudio Aguirre highlighted that, in terms of investment, 2020 has been a great year, closing with more than €6.4 billion committed in underlying/invested funds and with more than €1 billion of additional investor commitments raised, for the fifth consecutive year. Historic investor commitments are expected to exceed €9 billion in 2021. Regarding the team, this year the number of new professionals was increased by 10. He highlighted the high level of commitment of the entire team to investors and the high degree of alignment of interests with them, with the investment commitments of the team and Altamar’s partners in their own funds now exceed €235 million. Another aspect that the chairman highlighted is the involvement of Altamar employees in the Altamar Foundation, which has resulted in 34 partnerships and initiatives aimed at meeting the needs of the most vulnerable groups and which have benefited more than 600 people directly and more than 4,500 indirectly.
For the second consecutive year Altamar has obtained the “Fund of Funds Manager of the Year in Europe, Middle East and Africa (EMEA)” award, of which Claudio Aguirre said he was proud and grateful. “It once again gives us immense satisfaction, since it represents a recognition of our 17 years of history, focused on providing investment solutions in private assets to institutions, family offices and private individuals, always seeking the preservation of capital, generation of Alpha and a service that we try to make it exceptional for all our stakeholders”.
Claudio Aguirre also reviewed the fundraising activity, mentioning among others the ACP S4 secondaries fund and the upcoming launch of Altamar XI, the seventh primaries programme; the new venture capital launches, Galdana III and Galdana Asia I; the first real assets co-investment fund, real assets, ACP Real Assets Sustainable Megatrends, to invest directly in megatrends, and the fourth investment programme in real estate funds, Altan V.
Within private debt, he pointed out that two funds are being raised to invest in direct lending and opportunistic credit, mainly in Europe and the US, Altamar Private Debt III and AltaCam Global Credit II, the latter together with our partners CAM Alternatives. In addition, he announced the launch of a second impact fund focused on life sciences.
The chairman’s speech ended with a review of the firm’s organic growth during its 17-year history and announced the firm’s first inorganic operation: the agreement reached with CAM Alternatives to combine the two businesses and create a pan-European, independent private asset management and investment solutions firm, Altamar CAM Partners, which will have €14 billion in assets under management.
At this point, Claudio Aguirre invited Rolf Wickenkamp, co-CEO and founding partner of CAM Alternatives to join him on stage to discuss the reasons that have led the two companies to combine their businesses and to analyse the challenges they will face in this new stage. Rolf Wickenkamp highlighted the complementary nature of the two firms in terms of clients, geographies and products, as well as the affinity in terms of the values that inspire them.
Afterwards, José Luis Molina interviewed Henry McVey, partner and head of Global Macro at KKR, who analysed the impact of the post-pandemic situation on public and private markets and its influence on the construction of investment portfolios. In his opinion, the excess savings generated will reactivate consumption in the coming years, inflation will not be so high, although wages are rising and therefore this will be good for consumption. He believes that real rates will remain low for quite some time and that thematic investments will become increasingly important. Regarding asset allocation Henry points out that in an environment where expected asset returns are lower, one must look for opportunities with a higher risk profile.
Rocío Fernández then described the main milestones achieved by Altamar in terms of sustainability in recent years, as well as the values on which the firm bases its commitment to it. In Altamar’s journey towards the global integration of ESG criteria, she highlighted the increased rigour of investment procedures, the launch of new ESG plus/impact products and the strengthening of the ESG approach through the integration of Altamar and CAM.
Marcel Rafart analysed the Venture Capital market and highlighted that the pandemic has served as an impetus for the digital revolution, which is experiencing great acceleration, entailing a growing risk of obsolescence and even survival for those companies or sectors that do not adhere to it. He also focused on another aspect, which is that technology companies are staying in the private market longer and as a consequence more value is being generated than ever before at this stage. The recent IPOs of technology companies at very high valuations during 2020 and so far in 2021 are a clear indication of the benefits of investing in the private phase and selling in the public phase.
Galdana Ventures currently advises five programs. Galdana I with a size of €275 million completed its portfolio during the first quarter of 2018 with a total of 47 commitments across the United States, Europe, Israel and Asia (mainly China). Marcel Rafart highlighted that the J curve of the fund has been very limited in time and that to date there have already been 74 divestments of companies in the underlying portfolio, which has led to the first distributions to the fund’s investors. A second vehicle, Galdana SPV I was raised to invest $200 million in one of the most recognized venture capital managers in the world. The third program, Galdana II, of €465 million, follows the same investment strategy as Galdana I, and has just finished its investment capacity with a total of 91 commitments in 41 managers.
The fourth and fifth programmes, Galdana III and Galdana Asia I, are currently under construction, with a target size of €600 million and €200 million respectively. Galdana III follows the same investment strategy as Galdana I and II, while Galdana Asia I is a programme that invests in parallel with Galdana III, but exclusively in Asia, and is being launched to allow the investor to adjust its optimal exposure to this region.
Miguel Zurita, who spoke about the evolution of the private equity market, highlighted the resilience and rapid recovery during the COVID crisis. Fundraising is already recovering after the slowdown during the confinements. He pointed out that due to growing interest in the asset, in the case of buyouts dry powder levels reached an all-time high in 2020, but we are nevertheless at reasonable levels when compared to investment levels. Another aspect he highlighted is the recovery in the number of buyout transactions after the falls in activity last year, a situation similar to that of the secondary market where record levels are expected in 2021.
Zurita also discussed the performance of Altamar’s funds in this asset class, whose valuations are significantly ahead of last year and show very positive preliminary data for 2021. He highlighted that Altamar’s Private Equity Buyouts team is very focused on completing the investment of Altamar X, the most recent global primaries programme, which has total committed assets of close to €750 million, as well as investing the fourth secondaries programme, ACP Secondaries 4, which has started very successfully and is currently completing its fundraising with a target size of €750 million.
The real assets market and the evolution of Altamar’s funds in this class were analysed by Fernando Olaso, who focused on the real estate sector, and Ignacio Antoñanzas, who addressed the infrastructure sector. Olaso spoke of a significant impact on the real estate market, although with significant disparities between sectors, with retail and hotels suffering the most and, to a lesser extent, offices. During the second half of 2020 there has been a gradual recovery at varying speeds. He also mentioned the rise of the so-called “alternative” segments, such as, for example, student accommodation, social-health sector (retirement homes, health centres, science parks, etc.) or digital infrastructure (data centres, telecommunication towers, etc.). In the future, these sectors are expected to become increasingly important in the construction of institutional investors’ real estate portfolios.
Regarding the performance of Altamar’s real estate funds, Olaso said that there has been an uneven evolution of the portfolio’s valuation between sectors most affected by the healthcare crisis and sectors favoured by megatrends, particularly residential, including build-to-rent and student residences, and logistics. Investment activity has slowed down during 2020, however there were significant divestments that generated a significant level of distributions. Among the investments, he highlighted the most significant in the 2020-2021 period in the three sectors that are trending: technological developments, logistics revolution and science and health. To close this chapter, Fernando Olaso presented Altan V, a new real estate fund with global reach.
In relation to infrastructure, Ignacio Antoñanzas highlighted the growth of this asset class with an increasing exposure of institutional investors, in an environment in which infrastructure activity will be further increased by government plans and the needs arising from the digital transformation and energy transition. He also highlighted the positive evolution of valuations in all infrastructure sectors, with the exception of some assets in the transport sector. Regarding Altamar’s funds in this asset class, he noted that the impact of COVID-19 was very limited on valuations in the first quarter and that portfolio valuations are currently above pre-pandemic values.
To conclude the chapter on real assets, Pilar Junco, Antonio Guinea, Antonio Villalba and Enrique Sánchez-Rey presented some of the main investments made in this area and linked to megatrends, such as an investment in the largest independent operator of telecommunication towers in France and the investment in a company related to the energy transition that is a leader in the management of decentralised power generation plants for industrial customers in the Nordic countries. The latest investment they presented referred to a portfolio of R&D centres and laboratories in the main life science hubs in the US and UK.
The review of the situation of the different areas of the company ended with an analysis of the market and the evolution of private debt funds by José María Fernández and Rodrigo Echenique. They focused on the new AltaCAM Global Credit II (ACGC II) fund, which will invest in direct lending and opportunistic credit funds to generate attractive returns in stable or rising interest rate environments, de-correlated from other fixed income assets and broadly diversified. Regarding the Altamar Private Debt I fund, they reviewed the main figures and highlighted the rapid recovery of the fund’s valuation after the falls in March 2020.
The presentations of the representatives of Altamar’s investment areas sparked the interest of the attendees, who subsequently sent several questions that have been answered directly by email by the heads of each area.