Coller Capital held the final close on $7.2bn for its latest fund on the last day of 2015. Secondaries Investor recently caught up with Stephen Ziff, a London-based partner responsible for origination and execution, who shared his views on GP-led deals, investing its Fund VII, and Brexit.
Which areas of the market are you most excited about this year?
There are still opportunities within the banking universe which are more complex and challenging. Europe never really got its act together post-global financial crisis like the UK or the US did. In the US there was the Troubled Asset Relief Program (TARP) and in the UK the government intervened with many financial institutions, but this happened less so in Europe. At some point, European balance sheets have got to start to unwind.
How is the deployment of CIP VII going?
It’s going well – we’ve invested in a good mix of transactions. Generally, we’re cautious about the market, though. The public markets dipped at the end of last year, and then bounced back, but investor uncertainty is being reflected in heightened volatility. And that uncertainty has only been exacerbated by Brexit, of course. In our view, this is more than ever a time for fundamentals, not flights of fancy. Having said that, we know that the kind of dislocation caused by events like Brexit creates opportunities for a business like ours.
How do you see the restructurings market evolving?
It’s a growing area we see developing over the next three to four years and beyond. That’s a function of the 12- to 13-year period where funds have lived through the global financial crisis, but they’ve lost five years. They have good assets and good managers but need another three to five years to maximise returns and may need a sprinkling of additional capital.
Are restructurings a choice or burden for LPs?
Restructurings are definitely a choice for LPs. To facilitate a restructuring you need to preserve the status quo, as well as give LPs the option of liquidity. LPs can choose to remain, or achieve liquidity. LPs may need to deploy capital in other areas, or they may believe it’s a fantastic GP, but one that has struggled through the global financial crisis.