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- Tawfik, welcome.

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Just outline for me, if you would,

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some of the challenges facing the

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private equity industry at the moment.

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- The private equity industry

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is coming off two incredible
decades, you know.

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We called it the golden
age of private capital,

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but a lot of things have changed

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in the last 12 to 18 months
after the pandemic, you know.

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We have high interest rates,

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which means that leverage is
not easy to get, you know.

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We don't have free money
basically to do deals.

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Inflation puts a lot of pressure

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on companies to continue to improve

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their cost performance in particular.

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We have dislocations of the supply chain

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a little bit of a
reversal of globalization.

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So there's no shortage of challenges

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that the industry is facing.

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On top of that, the
fundraising environment

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has been a little bit harder, you know.

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Some funds are still able to raise

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significant amounts of capital,

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but others are finding it a lot tougher

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than it was a year and a half ago.

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- What are the key trends

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that you are witnessing at the moment?

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- So we see a few trends.

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The first one is that
big capital suppliers

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are looking for big customers.

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And this is no different than any industry

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where suppliers and
customers come together.

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The second one is some
of the new strategies

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that are emerging at scale.

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Think about private credit for example.

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This is a great time to have
a private credit strategy.

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Infrastructure, which is an asset class

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where most providers of capital
have been underallocated,

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continues to see a lot of appetite.

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And then we have other parts
of the private capital world

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that are a little bit more challenged.

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Commercial real estate
would be one of them.

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Venture capital is another
where I don't think

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we have recovered from the
highs of 18 months ago.

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So it's a little bit of a
story of haves and have nots

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within what we commonly
call private equity.

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- Which of those trends do you think

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presents the biggest opportunities?

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- I think the credit strategies.

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I mean, you know, when
you think about the last

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20 years, low interest rates.

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So when you have money that's quasi-free,

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you can make any valuation work.

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I think we've entered a different era

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where credit strategies
are going to become crucial

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and balance sheet optimization

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is going to become important again.

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And so the ability to
provide capital up and down

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the capital structure
becomes really attractive.

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That also gives a little bit
of diversification for the LPs.

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So my bet is on private credit.

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- Will the good times
ever return? As they were?

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- I think so. I think so.

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I'm not sure we will see as good times

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as we have seen maybe
in the last few years.

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But this industry has a role to play

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in capital formation.

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We have public markets.
We have private markets.

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I also think that a lot of
appetite exists within retail

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to actually provide
capital to private equity.

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So it might not be as good
as it was a few years ago

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but I'm very bullish on the
industry for the next decade.

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- Tawfik, thank you so much.
- Always a pleasure.