The best private capital days are over, says Egyptian billionaire Nassef Sawiris

Keep –Logs informed with free updates

Simply register —vos at Private capital Myft Digest: Delivered directly to the inbox.

The private capital industry has exceeded its peak and has a massive challenge in selling trillions of dollars in assets, according to the industrialist and the billionaire investor of Nassef Sawiris.

Sawiris, who has invested parts of his fortune in funds in several shopping companies, said that he and others supporting private capital funds were frustrated with the lack of distributions in recent years. Companies have struggled to get out of investments in the midst of post-paid slowdowns of clothing and initial public offers.

“Private capital has seen its best days … they cannot leave. The outings are so hard,” Sawiris told Financial Times.

“(Investors) are so frustrated. They call them (shopping companies):” I have not seen any profitability, you have not returned money in the last five, six years. “

Sawiris had a special goal in using “continuation funds” to recycle capital, a tactic for which private capital The groups, instead of selling an asset to another owner or publicly listed, transfer the asset to a new fund where they still keep control.

“The continuation funds are the biggest scam there, because you say” I can’t sell the business, I’ll do it again, “Sawiris said.

Continuing vehicles have become more and more popular in recent years, increasing around 50 percent for a record of $ 76 million last year, according to a report by the Houlihan Lokey Investment Bank.

Comments occur when Sawiris has been overseeing the rupture of their chemicals and fertilizers that the Dutch leisure.

The group in September agreed to their fourth important eliminationProviding gross income from their assets to $ 11.6 million of offers that occurred with commercial buyers instead of shopping stores. It has now sold most of its assets, including its world -class methanol business, tannubs and a low carbon ammonia project in Texas.

The leisure has used these sales to return cash to shareholders. Including a payment that will be made by the end of this week, it has distributed $ 6.4 million over the last four years, with an additional payment of up to $ 1 million scheduled after the sale of your methanol business is closed.

Sawiris said that the company was “very fortunate with the calendar” of the disposition, given the crisis of the market that has interrupted the preparation, a turn against more sustainable assets investment and a decrease in gas prices.

Sawiris told the ft In an interview Last year, leisure could become a cash cash company that pursues acquisitions in different industries.

He said he approached dozens of companies with the income of his assets sales.

Many of them were owned by private capital groups in the hope of an outlet, said Sawiris, who added that he did not find one of them to be an attractive goal for an agreement.

“One year ago we examined 70 different companies that would have wanted to merge with leisure because they were paired and obtain a list and all this … all the private heritage that cannot come out,” he said. “We said” how, why are we there to solve someone’s problem “?”

He also criticized the priorities of private capital managers, saying that they were much more focused on capital collection for their investment vehicles than the operational performance of their portfolio companies.

“90 percent of the fundraising and 10 percent are engaged in managing business,” he said. “They attend the board meetings, dinner on the board and there is a reason why they did not execute the plan.”

After decades of expansion, the assets of the private capital industry reduced last year For the first time since the Bain & Co consulting has begun to keep track of the industry assets in 2005.

Industry assets in June 2024 dropped only 2 percent in a year earlier up to 4.7 TN, shopping groups have faced more challenges, as market volatility triggered United States rates Slowly reduced from the preparation.

Investment groups have faced the problems of selling assets after buying high valuations in recent years, complicating their fundraising efforts.

In the midst of the wider challenges in the private capital industry, Sawiris said that the best positioned groups to succeed were those who had grown up enough as financial institutions such as Black stone to challenge major loans.

“The only guys who have a future are the boys who found a niche as a competitor for Jpmorgan and Bank of America.”