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SpanishInterview with Manuel San Salvador, Founder and Managing Partner of Antwort Capital S.A.
Manuel is the Founder and Managing Partner of Antwort Capital S.A., an independent feeder funds’ platform that provides access to Private Equity funds. He is also in the Board of some other PE Funds.
He has developed his career in the asset management and private banking fields having led as some of the top private banking operations in Spain as CEO such as Merrill Lynch Private Banking, Lazard Wealth Management or Banco Urquijo. He has also performed management positions in different international banks in the UK or Switzerland with Merrill Lynch and Barclays Private Bank and in Luxembourg lately as CEO of Andbank Luxembourg.
Antwort facilitates access to alternative investment funds. What services do they offer and to whom are they mainly addressed? What is their value proposition?
Antwort is an independent alternative asset fund specialist, with headquartered in Luxembourg and a very strong team of nine professionals.
We support well-informed private investors and wealth managers, such us private banks, family offices or independent financial advisors to provide access to private markets’ funds that would otherwise be out of reach, overcoming the barriers posed by high minimum commitment requirements. The minimum commitment in our feeders is 150.000 euros.
In contrast to Multi-Manager firms managing funds of funds, each Antwort vehicle or feeder fund invests in a single fund, offering a tailored solution for accessing specific funds.
Our unique value proposition is a win-win for banks, family offices, and their clients due to several key factors:
“We support well-informed private investors and wealth managers, such us private banks, family offices or independent financial advisors to provide access to private markets’ funds that would otherwise be out of reach, overcoming the barriers posed by high minimum commitment requirements.”
- Provides access to middle-market Private Equity funds with reasonable minimum commitment requirements.
- Implements a robust selection process, involving a research team and a solid Advisory Committee that conducts due diligence reports on invested funds.
- Offers scalability to set up a feeder for banks, family offices, or independent advisors by leveraging Antwort’s investor network, reducing costs compared to creating their own feeder.
- Facilitates and streamlines information access, as Antwort’s feeder becomes a significant investor in the funds it invests in.
- Provides direct access to master fund managers, allowing family offices, independent financial advisors, and banks to focus on their core business.
The outcome is an exceptionally efficient vehicle, boasting a total expense ratio (including all costs) below 1% per annum, no carry interest, and minimal IRR loss compared to the fund where we invest. In terms of capital calls and distributions, we mirror the fund where we invest, ensuring that our IRR closely aligns with the net IRR of the fund.
From an investment point of view, where are the opportunities now? What type of assets are you currently betting on?
We believe that it is a very good moment for buy-out funds, private debt funds and for funds specialized in secondaries PE Funds.
The increase in interest rated will affect the companies valuations, is going to be a buyers’ market for buy-out funds and particularly in mid-market In the case on private debt funds, the market situation is forcing the companies to look for alternatives rather than banks and there are some alternative ways to structure those loans that are very creative like for example the revenue lending strategies.
In response to these trends, we are introducing feeders that specifically target these strategic approaches, leveraging the expertise of seasoned managers.
“We believe that it is a very good moment for buy-out funds, private debt funds and for funds specialized in secondaries PE Funds.”
What is your outlook for the alternative asset market?
I am confident that alternative investments, particularly in Private Equity and Private Debt, will persist in expanding their share within private investors’ portfolios. Over the past decade, private assets have demonstrated the fastest growth in many portfolios.
In response to this trend, we anticipate a more frequent introduction of investment vehicles, such as multi-manager fund of funds, feeder funds offering access to specific individual funds, and other retail instruments like ELTIFs, as part of the ongoing democratization of private equity exposure.
While institutional investors have already contributed significantly, constituting up to 30% of total allocations, the substantial growth is expected to come from the wealth management sector. Currently, the average exposure to private assets in individual investor portfolios ranges from 5% to 10%, and this is projected to double in the coming years.
Antwort operates from Luxembourg, what advantages does the Grand Duchy offer in the financial sector and more specifically in the fund industry?
Antwort is strategically positioned with an international focus, and Luxembourg serves as the ideal hub for developing a platform to distribute feeder funds across Europe. Several key factors contribute to Luxembourg’s suitability:
- High Regulatory Standards: Luxembourg boasts a highly regulated environment overseen by a robust regulatory body, the CSSF (Commission de Surveillance du Secteur Financier).
- Global Fund Hub: Luxembourg holds the prestigious position as the world’s second-largest location for the registration of mutual funds, providing access to a diverse range of unique and appealing investment funds.
- Comprehensive Service Providers: The jurisdiction offers a strong network of service providers, including legal experts, management companies, depository banks, and more, all contributing to the efficiency of asset management operations.
- Social and Political Stability: Luxembourg is characterized by social and political stability, a crucial factor in the contemporary landscape.
- Geographical Heart of Europe: Situated at the geographical heart of Europe, Luxembourg serves as a melting pot of diverse cultures. This multicultural environment facilitates the exchange of valuable know-how and expertise, contributing to a dynamic and collaborative atmosphere.
“At Antwort, our focus is on providing private investors with the opportunity to access these promising private market opportunities.”
What does 2024 look like? What are your biggest challenges? How are you dealing with a scenario of uncertainty and high inflation?
In the near term, the private investment landscape is poised to face challenges in 2024, encompassing deal volume, exits, and fundraising potential, all against the backdrop of a persistent environment of high inflation and interest rates.
These interrelated factors contribute to the complexity of the situation. In a buyer’s market, convincing companies’ sellers affected by lower valuations becomes challenging. With fewer exits from funds, investors find themselves with diminished resources to allocate to new funds, exacerbating the difficulties in fundraising.
However, such challenges are not unprecedented in private markets. Private Equity has weathered similar environments in the past. Over the long term, this asset class has demonstrated outperformance compared to traditional liquid portfolios of equities or fixed income.
The premium associated with Private Equity appears to exhibit low correlation with listed equities, relying not solely on leverage and showcasing its strongest long-term outperformance when public market returns are moderate. Historical data indicates that during periods of worsening macro and market conditions, private equity tends to demonstrate higher outperformance.
In this landscape, well-managed companies with a clear strategy and competitive advantage are positioned for sustained success over the long run, irrespective of the current interest rate environment and inflation.
At Antwort, our focus is on providing private investors with the opportunity to access these promising private market opportunities.
