- Investors worried about market downturn
- Carlyle’s Daniel D’Aniello remains upbeat
- Technology becomes big focus
Geopolitical uncertainties, market volatility and the weak dollar have alternative-investment managers worried about the way forward. At the same, they said they were excited about the opportunities presented by rapid technology changes.
That’s the upshot of a survey of about 100 institutional investors, fund managers and industry leaders who attended the Cayman Alternative Investment Summit in the Cayman Islands on Feb. 8-9. The summit was hosted by Dart Enterprises.
Sixty percent of the respondents thought a market downturn would come in 2018, according to a survey report. Another 21 percent said it would come in 2019, 8 percent in 2020, and only 10 percent were upbeat that there wouldn’t be a meltdown in the near future.
Count Daniel D’Aniello, a founder of Carlyle Group, among the optimists. In his address, “An Industry Vision: The Dawn of a new Era in Private Equity,” D’Aniello counseled that “the world has not ended. The market will be back. Stay true.”
That said, panelists at the conference said that even prior to recent stock market volatility, the model of private equity has changed.
Michael Falk of Comvest Partners, a middle-market private equity firm, speaking during the session “Alpha: A fantastic beast and where to find it,” said that instead of buying a business at a low price, the model today is “to buy a business that’s got a lot of room for improvement.” The remark is according to a tweet issued by the conference host, although it’s not clear if this was a direct quote.
At the same session, Max Darnell of First Quadrant, an investment management firm, described a different type of ROI. “A return on ingenuity — doing something that’s innovative and distinctive,” he said, according to a separate tweet.
Indeed, 60 percent of survey respondents said that investment in innovation should be top priority for CEOs in 2018.
Carlyle Group’s D’Aniello said that big data, connectivity, automation and innovation are the key areas where technology is driving business value. He added, “Every deal is a technology deal and we’re preparing as such.”
Daniel D’Aniello, a co-founder of Carlyle Group.
Action Item: More about the Cayman Islands conference: https://www.caymansummit.com/