By Philipp Freise Nov 03, 2021
A few weeks ago, I had the opportunity to speak at IPEM 2021 in Paris. It was one of the first in-person events to have taken place in the European private equity sphere since the beginning of the COVID-19 pandemic one and half years ago. At the event, I had the chance to speak to Sam Turvey, Partner at communications consultancy Maitland/AMO, about the current market environment, KKR’s investment strategy in Europe and the themes and sectors that we find particularly attractive in Europe.
As I allude to in the interview linked below, I believe the effects of the pandemic have accelerated the trends that we were already following: technology and digitalization, the growing demand for healthcare products and services due to an aging population and sustainability.
First, the pandemic has underlined the importance of technology and digitalization. While this is true across the world, it was particularly notable in Europe, as it has shown that there is much work to be done, especially when comparing the current state of the digital economy to those in the U.S. or China. As a global investor, we can leverage our capital and access to our global network, in addition to our experience working with entrepreneurs, family-owned business, and management teams in the region, to enable companies to seize on the opportunity that the digitalization backlog in Europe has created.
Secondly, and to nobody’s surprise, COVID has laid bare the rapidly increasing demand for health care services and products. This holds particularly true for Europe, where – outside of the pandemic – an aging population is structurally driving this increasing demand . As many companies are working on digitalized and personalized solutions to enable more people to live longer and healthier lives, KKR has the opportunity to support these companies and unlock the growth that the structural circumstances create.
Third and lastly, we see an outsized opportunity in all aspects relating to ESG and sustainability. Europe’s response to the crisis, particularly at the supranational EU level, centered around the notion of building back greener and integrating measures to fight the pandemic with the overarching Green New Deal. This approach firmly cemented Europe’s leadership with regards to sustainability efforts and policy measures to mitigate climate change. And it is aligned with how we view ESG aspects: as fundamental and sustainable value drivers.
While these trends – seen individually – seem to be only loosely connected, there is a binding element between them that makes them especially attractive for us: We are committed to investing in companies with business models that drive solutions to social challenges. In this way, we can exert a positive influence with our investments and want to continue to help shape this change in the future. In other words: we can help make the world a better place – one investment at a time.
If you want to hear more about these views, have a look at the video below.