Which are the different categories of Private Assets?
Bastillon offers privileged access to investments in non-listed SMEs, startups and Real Estate. Bastillon partners, who share a long experience in financial products and listed assets, have spotted the growing demand for private assets by investors unhappy with the volatility and poor performance of some listed assets. This trend will most likely be reinforced in the coming years with the arrival of a new type of investors willing to directly invest in SMEs and startups looking to disrupt established industries.
Any data regarding the performance of Private Assets?
2020 Global Private Equity & Venture Capital report by Preqin (NB: LPs means Limited Partners that invest in Private Equityfunds)
‘86% of LPs told us that they intend to allocate as much or more capital to the asset class in 2020 as they did in 2019. Why is that? One reason is that most investors are satisfied with how their private equity portfolios are performing. In fact, 87% of LPs surveyed by Preqin said that returns in 2019 had either met or exceeded their expectations. And LPs with access to the best private equity funds are benefiting from higher and higher returns. For example, top performing funds of vintages 2015 and 2016 are delivering net IRRs of 23.0% and 25.9% respectively’
‘The core role of private markets in modern portfolios’ released by the BlackRock Investment Institute in March 2019:
‘Private markets occupy a significant share of institutional portfolios. They have evolved considerably and now offer exposure to a broader array of industries, geographies and capital claims. Asset owners, from sovereign wealth funds to endowments, have steadily upped allocations to private markets in the hunt for higher returns and to diversify away from public markets. We believe private markets will keep playing a growing role in portfolios as more investors find that the diverse array of private assets – from infrastructure debt and real assets to private equity – can help better achieve certain objectives.’
How do you select your mandates?
We leverage on our expertise and our network of entrepreneurs and external advisors to access to private deals. We have signed partnerships with selected professionals in various industries and countries. We then conduct a pre-due diligence review of the business that covers the following aspects:
- Quality and experience of the Management team,
- Degree of innovation of the offered products/services, patents & awards,
- Addressable market,
- Development stage (early or advanced, existing of a Proof of Concept, etc.),
- Review of the forecasted revenues,
- Valuation of the company
What are the different steps of the process?
The full investment process is the following:
- Sourcing of a deal
- Pre-due diligence
- Valuation analysis
- Drafting of the Investment Teaser and Info Memorandum
- Selection of a list of prospects potentially interested in the acquisition, funding or development of a company or project
- Organize and supervise discussions/meetings between the two parties
- If needed, assist in the due diligence
- Assist in the final negotiations
What is your fee structure?
Bastillon applies a classic fee structure formula composed of Retention fees and Success fees. Retention fees cover the preliminary work performed by Bastillon (see FAQ 3. How do you select your mandates?) and is the way for both parties to be fully committed in successfully conducting the mandate signed between them. Success fees are paid only if the mandate has been successfully conducted until its end and a deal has been closed.
Will Bastillon co-invest?
Bastillon is not a fund manager, but may decide on a case-by-case basis to be paid via shares in the client company.