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Some of you have been asking me “What’s SuperReturn all about? And what were my highlights?”. So here’s a quick post to recap the experience and to celebrate two of the folks who’ve supported NOREMO and helped us get as far as we have in the last 12 months - George Danner and Robert Bachan!
SuperReturn International in Berlin is a global conference that brings together the leaders of Private Capital to make contact, do business and celebrate their very existence. These are some of the biggest titans of modern-day finance and whose everyday work is too often shrouded in mystery, and if you live in the Thames Valley like I do, a certain stench! Sometimes that criticism is fully justified; more often it’s bred in ignorance and misunderstanding. What it is all about is capitalism, in the raw, and with a rarefied edge!
The main players are the Limited Partners (LPs); typically asset managers, family offices, life insurers and pension funds, who are looking to deploy the huge cash deposits their customers have paid in and seeking returns above what they can get from a regular interest-paying bank account, government bond or public market equities investment. And then there are the General Partners (GPs), the operating partners of a typical Private Equity fund; those seeking to raise capital from the LPs to invest in their next fund so that they can go out and buy-up equity stakes in businesses active in all industries and across all regions of the global economy. And then there are the funds and specialist firms active in the Private Credit and Secondaries Market - both huge topics last week in Berlin. And then finally there are the investment banks, the big consultancies, and every other service provider imaginable trying to catch and divert their own spout from the Private Capital cashflow fountain.
Running annually since 1998, SuperReturn International is a three day conference hosted at the InterContinental Hotel in Berlin and celebrates the most successful Private Equity fund managers. These are the rockstars of the finance world and at SuperReturn you get to rub shoulders with them. You get to hear their views on the state of business and geopolitics and where we are headed to next. You also get to hear from a handful of real-world rockstars of music and sports brought in to add glamour and capture audience attention. The main conference was preceded by the Secondaries Market Summit and the Technology Value Creation Summit - why we were there; plus a whole load of other specialist summits dedicated to Private Debt, Sports Investing, Climate & Energy, Sustainability and more. And just in case they felt they were missing out the Venture Capital (VC) funds had their very own conference SuperVenture just down the road at the Hotel Palace, talking all things startup. So it’s quite an event attended by 1,000s of people.
On the Monday, we had an early start. My wife is an early riser and didn’t object to getting asked for a lift to the airport at London Gatwick at 4.00am on a Monday morning. Now that’s someone very special. After landing in Berlin and dropping our bags at our hotel we arrived at the menu conference venue by 10.00am; just in time for the Secondaries Summit. This is where we first heard that all is not rosy in Private Equity land. The lack of Exits by GPs in Private Equity that was so characteristic of 2024 was continuing well into 2025. Multiple reasons were offered; with a lot of the blame pointed at the new US government, disruption to trade, inflationary pressure and geopolitical uncertainty caused by Liberation Day. Mostly though, recognition was widespread that the good times were over; record-low interest rates were no more. A lot of GPs had overpaid for acquisitions in the Private Equity boom years of 2019-21 and the inflation and interest rate rises of 2022-24 due to COVID-19 pandemic supply chain disruptions and energy price rises due to the war in the Ukraine had taken their toll. LPs are demanding their money back; but many GPs are holding out for more favourable conditions and seeking Exits at 15x EBITDA or more. The new game for GPs is “DPI or Die”. But now there’s a whole stream of alternatives on offer to GPs that want to hold out for a better payout further down the line if they can just raise enough to tie their firm and their portfolio over for the next year or two and offer their LPs that need “out” a route to cash. Continuation Vehicles offered by Secondaries Market specialist firms and Private Credit are two such examples.
* DPI = Distributed Paid-In Capital
On the Tuesday, the Technology Value Creation Summit. This is what we had come for. Tee’d up by a George Danner presentation masterclass on “What’s next for AI in Private Equity?” that spellbound the audience and forced them to put down their phones. And followed up by a few pearls of wisdom on what to watch out for from Rob on his “Building a solid data stack” panel and myself on my “Spotlight on software” panel. Value Creation is that imaginary theme that only people close to the Private Equity industry have any clue as to what the term means. In previous decades, Private Equity firms have loaded their Portfolio Companies up with debt** and used the cash to Accelerate Growth by adding people to the Sales team and increasing the Marketing budget; or by driving Geographic Expansion into new regions and international markets; or by funding Buy and Build acquisitions of complementary businesses. That’s how GPs typically drove EBITDA improvements in a Portfolio Company over a 3-5 year timeframe before selling it on to another fund, corporate buyer or public market listing. With the prevalence of inflation and substantially higher interest rates since 2022, that route to EBITDA improvement is no longer so easy. And to be successful, GPs now need to focus a whole load more on what they call Value Creation. In the past, this has meant Business Transformation by Recruitment of a new senior business team to drive Organisational Change through Cultural Change and Skills Training. And in the last 5 years or so, the importance of Technology is now more than ever widely recognised. Although most leaders at GPs have come from a corporate finance, strategy consulting or investment banking background, it’s just about impossible to ignore that 34% of the market value of the S&P 500 are now Technology firms!!! So GPs are now desperate to drive Digital Transformation across their Portfolio Companies and use software apps, data and cloud technologies to unlock hidden operational efficiencies, improve the customer experience and ultimately drive top-line growth. However, that’s not easy for a whole raft of different reasons, but they know they need to do it nevertheless. And that’s before you even mention “AI” - which of course got said a lot!!!
** taxes in most jurisdictions are calculated after interest payments on debt have been deducted
On the Wednesday, the main conference began with a huge influx of people. Between the conference sessions in the dining areas, networking spaces and private meeting rooms there was quite a buzz with literally 1,000s of Investor Relations people and Directors of Firms making their pitches one-to-one. You were either buying or selling and if you were buying, then you really needed to be selling hard too. The best new GP funds are 86% subscribed, getting ready to close and have multiple LPs wanting to participate; so why should they take your money?
These big US investors were for the most part showing signs of unusual humility. Perhaps they see more opportunity for economic growth in Europe (and the Middle East) than they do back home - given the recent and ongoing disruption to global trade and uncertainty unleashed by the Whitehouse. Maybe the business opportunities in Europe for increased defence spending and infrastructure investment are too appealing!
Never was the contrast greater, between the patricians and the strivers - the clothes, the perfumes and the demeanours; the old family money and the street smart youngsters, working their b**t offs to make that next leap up the career ladder and earn their fortune or get their new business to lift off. You could see it all right there in the public dining area; capitalism in the raw! Who’s got; who’s not; and who wants to get ahead. It was a real thrill to play our part.
On the Thursday, we had a roll-call of presentations from some of North America and Europe’s most successful GPs over the last 30 years. From Rob Lucas, founder of CVC, Robert F. Smith founder of Vista Equity Partners and Orlando Bravo founder of Thoma Bravo. It was absolutely fascinating to hear their views on lessons learned and what comes next. Survivorship Bias is self-selecting at events like SuperReturn - but that’s who people today want to learn from. But the most inspiring presentation of the day came from Jim Coulter (founder of TPG) and Bono (yes the legendary frontman of U2!!!) showing what they’ve achieved with The RISE Funds over the last 10 years and proving unequivocally that Sustainable, Ethical business is good business and can be hugely successful if done right!!!
On the Friday, early flight home. Another early wake-up call. Berlin airport on Friday morning, that’s busy. Actually, it made me realise “wow” Gatwick is really doing a great job! - processing 10x the number of travellers through security checks and passport control in half the time; or at least that’s what it felt like!
And then there were the parties and the investment predictions; some of which were really quite legendary; but you either had to be there or you’re going to need to ask me directly if you really want to hear what those were all about!
Link to photo album from SuperReturn International - Berlin, 2005
Watch out for:
* George Danner speaker and host - “What’s next for AI in Private Equity?”
* Robert Bachan panellist - “Building a solid data stack”
* Matthew Jones panellist - “Spotlight on software”
* Dina Powell McCormick - BDT & MSD Partners
* David Roux - Baypine and Silverlake founder
* Serena Williams - Serena Ventures
* Jim Momtazee - Patient Square Capital
* David Rubenstein - Carlyle founder
* Rob Lucas - CVC founder
* Jim Coulter and Bono - The RISE Funds
* Nico Rosberg - Rosberg Ventures
* Robert F. Smith - Vista Equity Partners founder
* Orlando Bravo - ThomaBravo founder