Pictet Alternative Advisors SA (PAA), a 100% subsidiary of Pictet Group in charge of the Group’s alternative investment, has launched its first private equity thematic fund, Pictet Thematic Private Equity-Technology, aimed at professional investors.
The objective of the new fund is to take advantage of irreversible trends of digital transformation and its impact on local and global economy and society, which the pandemic has accelerated, bringing to light the strong dependence on digital processes, computer applications and social networks.
It will invest in no more than 25 of world’s best funds and select up to a maximum of 20 direct investments or co-investments in unlisted companies, with an investment horizon between three and four years.
This initiative involves two Pictet Group companies, Pictet Asset Management (Pictet AM) and Pictet AA. Pictet AM has pioneered thematic investment over past twenty-five years, a range in which manages $50 billion in fourteen strategies. Pictet AA, which began investing in private equity in the 1990s, has launched eleven multi-strategy funds and manages numerous segregated accounts, with assets under management totalling $17 billion. Pictet AA considers that unquoted markets are an attractive option to invest in the technology sector and harness its great potential for structural growth. In addition, these companies currently choose to stay private longer, so an increasing percentage of value is created in the years in which they are not listed, prior to IPO.
“Technology remains a fertile sector. We are in the first stage of the digital transformation globally and there are still many attractive investment opportunities. Computer applications, for example, are the fastest growing sector -expected to grow at 10% per year in next five years-. Internet use has grown dramatically, but will grow further, considering 41% of world’s population still does not have access. In addition, 5G alongside the Internet of Things is the next generation of mobile network technology, which promises to take connectivity to unsuspected boundaries. As digital technologies increase their presence in our lives, a new generation of disruptive companies emerges. Some will become well-known companies and others, although will provide a high return, will remain unknown to the general public.
So it is not surprising that the private equity universe of technology fund managers has grown in size and number over the past decade. We are convinced that technology is an attractive investment issue, as most IT application companies do not trade. Pictet AA’s expertise in building diversified portfolios, including investment in technology companies, whatever its development phase (from birth to final phases of venture capital, growth capital or leveraged buyout) makes this fund of controlled risk technology possible. Later we will study a next bet, probably in the health sector”.
Pierre Stadler, Head of Thematic Private Equity at Pictet AA
Pictet AA employs a systematic approach to building private equity fund portfolios. It maintains close and lasting relationships with a select number of best private equity management companies, thanks to which it has access to opportunities for co-investment or direct investment. Since inception thirty years ago it has participated in more than 150 private equity funds and 155 co-investments, of which 90 more than doubled (2.7 times) the capital invested. The investment process due diligence includes ESG analysis.
