Tikehau Co-Founder Sees ‘Massive’ PE Opportunity in Rising Rates

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(Bloomberg) — Tightening financial conditions are creating a “massive opportunity” for private capital providers, according to Antoine Flamarion, co-founder of Tikehau Capital.

“It’s going to be super bumpy,” Flamarion told Bloomberg Television’s Dani Burger in an interview at the IPEM private equity conference in Paris on Tuesday.

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Private equity firms are entering a new era, the co-founder of the French alternative asset manager said, adding that central banks have been very wrong on inflation.  

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With Brent crude topping $95 per barrel for the first time since November, “there’s no doubt that inflation is impacting our portfolio,” Flamarion said. The firm decided very early to invest massively in companies exposed to the energy transition, he added.

Rising regulation in the wake of the Silicon Valley Bank and Credit Suisse crises have prompted observers like JPMorgan Chase & Co. chief executive officer Jamie Dimon to insist that private capital providers will be celebrating. The banking system is strong, Flamarion said.

“Regulators are trying to regulate more and more — is it good, is it bad? It’s happening,” he said, adding that it’s more difficult for companies to borrow money, so they will turn to private capital.

Paris-based Tikehau was founded in 2004 by Flamarion and Mathieu Chabran, who both started their careers at Merrill Lynch. Tikehau employed 742 people across 15 offices in Europe, the Middle East, Asia and North America as of June 30, according to a recent press release. The firm has €41.1 billion ($43.9 billion) of assets under management as of June 30.

Tikehau and Altarea SCA announced in June they would raise a new €1 billion fund to address an anticipated wide liquidity gap in the real estate market.

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