Kenneth Pentimonti

Happy to share StepStone Group's 2023 Responsible Investment report that we released last week. There's a wealth of case studies highlighting our work in a range of areas from our promotion of financed emission measurement across private markets, our engagement with GPs on critical incidents, and how our Real Estate team engaged with a company to set science based net zero targets, where our additional investment was contingent upon the company committing to implement those targets. https://lnkd.in/eqxcCiVr

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Great webinar with FT Live on the Global M&A Outlook in the EMEA Region. There is a feel of the optimism in EMEA’s M&A landscape, with private equity leading the charge and valuations on the rise. Geopolitical certaintly, growth agenda, and interest rates certainly will provide confidence in the market, therefore, the future is looking really good. #wheredealsaremade #privateequity #mergers

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#Hargreaves_Lansdown Hargreaves Lansdown backed the £5.4 billion bid for the FTSE 100 fund manager today from a private equity consortium, a deal that will end its time as a listed company. The Bristol-based finance firm has been listed in London since 2007. It said today that the final offer valued its shares at 1140p in cash and would include a 30p per share dividend for the financial year which ended on 30 June. Compared to the Hargreaves Lansdown share price before the approach was first made in April, the price is at a premium of over 54%. The consortium is made up of CVC, Nordic Capital and ADIA. Hargreaves Lansdown is named after its founders – Peter Hargreaves and Stephen Lansdown – who set it up as an investment tip sheet. It now runs a state-of-the-art trading platform from which clients can run their own portfolios and pensions. https://lnkd.in/dKpizupy

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HETI RIPORT #KKR Can private equity produce excess returns above what is available in the public markets? It’s a question we’re getting from many individual investors as private equity investing opportunities have become more accessible through evergreen products. In answering this question, we start by looking at historical returns and some of the factors that have driven private equity’s outperformance relative to the public markets over time. We then address why we think private equity is positioned to continue outperforming in the future.

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Secondaries and GP stakes are harmonious areas of investment: both capitalize on the growth in private markets… firms are increasingly recognizing the benefits that a partnership can bring in terms of providing capital and expertise.     Thanks to PEI for the feature and Ward Young for the partnership on the demand we’re seeing across the GP stakes landscape!  

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Congratulations to our friends at $150 billion+ AUM private markets multi-strategy fund manager StepStone Group on closing on $3.3 billion for its sixth venture capital secondaries fund, far surpassing its target of $2.6 billion. It is the largest VC #secondaries fund raised to date, eclipsing the $1.45 billion that Industry Ventures raised for 10th venture secondaries fund last September. The 2021 acquisition of Baltimore-based venture capital #specialist Greenspring Associates has been a brilliant, complementary and highly successful partnership for both firms. And yes, I really like the fact that Greenspring Associates originated and still has a strong base in the #baltimore area. While GP-led secondaries have been far more common in private equity, it is noteworthy that the firm sees a more balanced set of investments across LP-led, GP-led and direct secondaries deals than its predecessor venture secondaries funds. The limited partner list is also remarkable: #Taiwan-based FUBON LIFE INSURANCE CO., LTD. committed $70 million, UK-based Border To Coast Pensions Partnership committed £45.7 million and the NSIA: Nigeria Sovereign Investment Authority and Montgomery County Public Schools Pension Fund both invested undisclosed amounts. Yes, #Nigeria has a sovereign wealth fund investing in alternative assets, private markets and venture capital secondaries - amazing! Prior fund limited partners included the Community Foundation of Greater Memphis, #Finland’s LUT University, the Memorial Hermann Health System, Mercy Health Foundation, @New Zealand Superannuation Fund (NZ Super Fund), #Oklahoma Police Pension and Retirement System, Samford University, School Employees Retirement System of #Ohio and State of Wyoming Treasury. I am sure many of them re-upped and even increased commitment sizing. A world-class list of global limited partners across allocator categories. Well done StepStone Group and see you again somewhere in the world sometime soon! #fundraising #alternativeassets #privatemarkets #venturecapital #capitalmarkets #sovereignwealthfunds #insurancecompanies #pensionfunds #hospitalsystems #superannuation #endowments #foundations https://lnkd.in/gUdJXRw3

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Great article - 100% agree with this. My question for the APAC market on the three trends highlighted in the article; Are APAC GPs willing to be more sophisticated with how they interact with the secondary markets and are they are willing to compromise on price when selling through secondary options? I think this is also a massive question facing other asset classes in APAC, Venture Capital for one - do funds also need to be more creative with exit opportunities as well given the usual methods are less tangible right now?

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My colleague, Raj Agrawal, is out with his latest #Infrastructure Market Review for KKR. “Digitalization, the energy transition, and the digital power problem are massive challenges that require scaled capital and deep sector expertise to solve, but also present a tremendous investment opportunity to those with the ability to solve them,” he writes. He dives into these investment themes, areas of opportunity and our risk-based approach to investing 👉 https://go.kkr.com/4hXFIn1

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With peak levels of dry powder in private equity, the deal environment is at an exciting inflection point.   Thanks to Reuters for including me in this insightful piece. 

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Is Now the Best Time to Raise a Private Equity Fund? According to industry leaders, it just might be. "I’m much more optimistic at this point in the cycle in 2024 than I was in 2023 and 2022," says Andy Lund, global co-head of Houlihan Lokey's Private Funds Group. Despite expectations of a slowdown, the first half of 2024 has been unexpectedly successful for PE managers raising capital. U.S.-based funds closed on $155 billion by the end of June, slightly ahead of the first half of 2023 (PitchBook Q2 2024 US PE Breakdown). Alex Russ, head of North America for Evercore's Private Funds Group, sees this as an ideal moment for GPs with open funds. "We saw fewer new fundraise launches in 2024 than in 2022 and 2023, leading to a slight easing, which we expect to continue into the second half of this year," he notes. However, challenges remain. LP capital is still largely locked until M&A and exit activities resume. Evercore anticipates flat PE fundraising figures for 2024 compared to 2023. Moreover, other asset classes are vying for already limited institutional capital, with private credit showing particularly strong growth. In this context, Maria Konnikova’s "The Biggest Bluff" offers an insightful analogy. Inspired by "Theory of Games and Economic Behavior" by John von Neumann and Oskar Morgenstern, the book explores von Neumann's belief that poker epitomizes the delicate balance between skill and chance that governs life. Doing well at poker isn’t just about playing well; it’s about playing well relative to everyone else. And even with the best strategies, luck plays a critical role. As Nobel-winning economist Daniel Kahneman notes, "The successful funds in any given year are mostly lucky; they have a good roll of the dice. There is general agreement among researchers that nearly all stock pickers, whether they know it or not—and few of them do—are playing a game of chance." The last two years were like drawing a bad hand in poker for those raising funds. The book also emphasizes the importance of thinking like a Strategist—something I’ve honed throughout my career. Each move requires reassessment based on new information. You need a plan that evolves with feedback and supports long-term, good decision-making. If you’ve lost your chips, was it due to an unlucky situation—or because your strategy was flawed? A recurring mantra of Poker Hall of Famer Erik Seidel is "less certainty, more inquiry." If that becomes your guiding principle, not only will you actively listen, but you will also adapt and grow. For GPs, strengthening relationships with existing LPs is more crucial than ever. Now is the time to leverage your learnings and craft compelling narratives that showcase your commitment to value creation and strategic growth. By highlighting your firm's ability to navigate complex market dynamics, you can strengthen LP alignment and foster the partnerships needed for long-term success.

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Why diversification and creativity matter in today’s credit markets A persistent supply/demand imbalance continues to shape the credit landscape. This creates opportunities for those willing to think outside the box. Here’s how investors are responding: Leveraging creative and scaled origination to uncover value in growing market segments. Allocating to non-correlated credit assets like asset-based finance (ABF) to their portfolios. As highlighted in #KKRCredit’s Q3 Market Review, segments like private ABF are gaining momentum. These non-correlated private asset classes—especially higher-yielding options —are becoming essential to strategic asset allocation. Why? Because like the tortoise in the race, they offer steady progress toward long-term success. https://go.kkr.com/4fxoM5d

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PE - Hedge Funds Hit by Lack of PE Exits (and one way that PE firms can boost exits) Financial Times: https://lnkd.in/edACss_X FYI - one way to get more PE exits is for the PE fund to have a domain expertise GTM and have deep knowledge on how to increase the Revenue Growth of portfolio companies which boosts cash, profits and margins. --- #pe #privateequity #business

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Private Equity funds are elevating their operating teams and partners as a key driver of value creation at their underlying portfolio companies. Learn how to implement these changes for greater success. #PrivateEquity #PrivateCapital David Brown I Hugh Lloyd Ellis I Kevin Desai I Steve Roberts I Mairi McInnes

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I had the pleasure of speaking recently at the PEI Operating Partner Forum in London about the challenges and opportunities to support our portfolio companies in building greater resilience. Thank you to Jim Corey from Blueridge Partners, and my co-panelists Alan Roux, Peter Colman and Kristen Paladino. Some thoughts from this session: -There is further opportunity to deepen our collaboration with our deal colleagues and portfolio management teams on what will move the dial on performance - active joint problem solving is key to unlocking value with greater speed; -Cash is king in this environment where leverage is going to be more expensive for longer - our CFOs are front and centre, along with trusted partners in our ecosystems; -Ensuring our portfolio companies have the right talent in place to anticipate and deal with multiple continued headwinds is critical; -There are some innovative opportunities to drive value through new digital technologies, like Gen AI, which we should experiment with over the coming period. It's not tomorrow's problem.

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Great to see repeated reference to an expected increase in carve-out transactions in addressing the corporate divestiture backlog. Something we do clearly observe

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We recently published our first Responsible Investment Report – an important milestone for us as a firm. The report outlines the efforts EMK and our portfolio companies have made over the past year in advancing sustainability.   You can read the full report below.   #ResponsibleInvestment

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Lots of talk about semi liquid funds… Duncan Hale and I discuss some of their characteristics and considerations. Such as allowing investors to access the #energytransition in a simple and flexible way. Schroders Greencoat LLP Schroders Capital

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If anyone would like hear my thoughts on stressed and distressed acquisitions please book your place on the link below or give Lizzy Tindall a shout

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This is exactly what we hear from the VCs that we back. In the UK, there is no shortage of capital for world-class founders. There is a shortage of world-class founders. We need to create the conditions where the very best founders choose the UK as the place to build their companies. If we do this, then the capital will follow. Strong-arming UK pension funds to invest in UK VC funds or, even worse, directly into UK companies, is not the answer. For a more detailed view on this, please see the white paper we published last year on the Mansion House initiative. https://lnkd.in/e86HSxrY

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