The coronavirus-induced necessity of raising funds virtually this year has done more good than harm for well-established private equity firms, industry veterans speaking at a private equity forum sponsored by Hong Kong-based AVCJ said this week.
"We haven't missed a beat," said Kewsong Lee, New York-based CEO of the Carlyle Group in a keynote interview Wednesday.
Carlyle, with $230 billion in alternatives assets, raised $18 billion over the first nine months of 2020, exceeding the prior year's $16 billion total in part due to the effectiveness and efficiency of virtual client meetings, Mr. Lee said.
Having conversations that start in the morning with Korea, Japan and China before moving on to Europe in the afternoon is something "you couldn't do ... in a world where you're hopping on an airplane," he said.
"From a productivity standpoint ... this is a step forward," agreed Jean Eric Salata, chief executive and founding partner of Hong Kong-based Baring Private Equity Asia, in an interview Thursday morning. "You can get a lot more done in a much shorter period of time." By contrast, flying around the world and meeting investors one on one is time-consuming and inefficient, he said.
BPEA has $21 billion in assets under management.
Both executives conceded their firms' smooth adoption of virtual fund raising techniques was a function of the relationships Carlyle and BPEA have forged with clients over the decades.
The technology, such as Zoom, underpinning virtual fund raising this year is especially beneficial for incumbents, Mr. Lee said. Limited partners "know who we are, know what stand for," he said.
To some extent, this year has been a matter of living off the reservoirs of good will BPEA has built up with its clients over time, Mr. Salata said. At some point, though, "you are going to have to top up those reservoirs," he said, adding, "You can't live in a virtual world all the time."