The Future of Dealmaking: EMEA

Good afternoon, everyone. Welcome to the SSNC Intra Links webinar that will delve into the future of deal making in the EMEA region for this coming year. Thanks to all the participant for taking the time to join us today. My name is Mika Matisya. I'm Senior Vice President at SSNC Intra Links and I will be your moderator today. I'm joined by a nesting team of panelists whom I will let's introduce themselves. Chris, let's start with you. Yeah, sure.

Hi, Chris Davis. I'm the Head of M&A at Six Group. I spent most of my career at Credit Suisse in various roles, originally investment banker, then Corp dev, then dealing with the large recoveries on Greensill. Thank you, Chris, Jens. Yes, good afternoon everyone. A pleasure, pleasure being here today. My name is Jens Khan. I'm heading the M and A-Team at Commerce Bank. We are advising clients particular in the in the mid cap phase on sell and and buy side mandates. And I've I've been doing that basically for all my careers, starting at at Roschadt many years ago.

Thank you, Jens Rosberg. Hi, good afternoon everyone. Rosberg Faslenezat I'm a managing director here in Houlihan's Dubai office. I'm principally in charge of our Middle East, North Africa business and I look principally after the oil and gas business. I've been an investment banker for over 20 years. I started off in New York where I was for 10 years, 10 years in London and not here. Thank you very much gentlemen. So on this way be now we are going to be discussing market trend, deal type, impact of regulation as well as how technology and other disruptive trends are going to play a critical part in the deal making industry.

And finally also talking about like what skills will be critical for deal makers in 2025. Just a quick reminder before we start for the audience, you can submit your question during the discussion via the Q&A section that you have on your screen and we will be addressing those question for the last 10 or 15 minutes of of this webinar. So the dear panelist, 2024 again you know has been another eventful year. Uncertainty is now is now the norm. Even though we we saw like a slightly market increase in 2024, it's still very complex to make deals. These are taking longer we we are seeing much less auction process and much more like 1 to one from actions.

Companies played a bit of waiting game in in 2024 and whether it was for uncertainty in geopolitics or waiting for central banks, action on interest rates, inflationary pressure, the the market never quite rebounded as expected. But that that being said, now that we have the US election behind us, the German election behind us now France, which finally has a government after so many months, multiple rate cuts now in the review to the M&A industry anticipate an increase in, in, in deal making. So that's the first question to you. How do you anticipate geopolitical or economic factor influencing deal making in the coming year? And let's start with with you.

Yes. Yeah, happy, happy to take that one up. So first of all, Mika, I think your observations are absolutely correct. I mean, with, with 2024 being somewhat of a mediocre year, generally speaking, and I think also 2025 first couple of weeks in into the year have have not really shown a major uptick in inactivity. But I think some, some numbers that I've seen rather indicate the contrary. And I, I think indeed what you, what you just said in your questions, this is to a certain extent at least due to the uncertainty based on macro scenes.

So Mr. Trump's policy agenda and, and the tariffs in particular play play a certain role. Also EU regulatory environment with a, with a, with a lot of questions with regards to the Green Deal and the potential reversal of, of some, some regulatory actions that have been taken a couple of years ago. Additionally, obviously Ukraine and the future of, of, of the war in Ukraine the, the various elections and I mean ultimately it's just very, very difficult for corporates to plan and really outline in a credible way their their business plan and the ideas for the future. And ultimately uncertainty is never good for M&A and uncertainty is the worst.

Uncertainty is absolutely the worst. And we are certainly living in uncertain times, right. So I mean, if you want to to to see it positively, I, I think Mika, what you just said, we have had now some, some major decisions, We've seen some major decisions in the last couple of weeks or months. And therefore, I think uncertainty might well decrease in in Q2 when it's a little more clear what, what Mr. Trump's agenda is, if there is a potential ceasefire, at least in in Ukraine, if, if the situation in in the Middle East remains around Israel remains, remains calm what what EU does, how a German government forms and if they they really start on some growth programs.

So therefore I think there is there is definitively hope that the the environment improves over the next couple of months, but we are not there yet. And so therefore what, what, what, what does it mean for M&A And Mikhail, you also touched based on that before. We still continue to see fairly many bilateral situations or processes that quite quickly focus on a very small number of parties. And we also see that it's rather strategic and that act currently and and PE businesses of PE remain fairly shy. We, we, we currently think this will sustain for the next couple of months and I think we have to all adapt to this kind of environment.

But on the other hand side it's not not really a bad environment. It's absolutely still possible to do deals. Thank you, Yens, who's there for from your position, like do you see the same trend with increase uncertainty in the coming months and potentially like a better H2? Well, our business is. A little bit different and and also my principle business that I look after is obviously driven by commodity as well. So not only do you have the uncertainty geopolitically as you guys outlined, but you also have the underlying volatility in the commodity price.

And nobody likes volatility the way they don't like uncertainty because nobody agrees on terms that way. What we've really seen not only last year but also over the last couple of years is we were in the epicenter of the conflicts, right? I mean Russia, Ukraine, I mean this particular region actually has seen a lot of influx of business interests if you like, right. So it has been an abnormally busy period. All of service providers have been banks, investment bankers, you name it. And obviously we on top of that we had the conflict in Gaza as well.

And surprisingly, I want to say in summary, it hasn't really affected our business. I can only speak for Ria Loki's business. If I look a little bit more broadly in the region, the difference is our business here is a growing business. So we we are building market share and and eating and and other, other other service providers pies successfully. So we've actually have seen a very active market, a very busy market and geopolitics as much as it's been sort of in everybody's decision making matrix has not really had a substantial impact on our day-to-day business. The big caveat however is we our clients typically are state owned, but these are governments and these are government associated companies.

Their decision making is different than if you like it in in Europe or even in the US Our market is not as deep. So our our deal making is much more lumpy. Our market is much thinner than that elsewhere. But our decision makers are long term. They can easily look beyond what the current sort of view is and and place decisions in the long term. Again, the other difference in our. Listen that you know, sorry to interrupt, you are specialized in in energy. You see like this positive trend because Olean because all the different sector is mostly new specific like energy focus.

We are a a growing investment bank, right? And I wanna in 2024 we had, we had a record year and and it's been and it's been a positive, positive year across all of our business units. And the again, the key differentiator here is also that we have a big restructuring business, right. So we are very well hedged if the corporate finance business is not doing is not doing as well as the other parts of the business. But I can, but I can tell you that we've had a a growing business across almost all of our sub sectors. Thank you, Chris.

So we are hearing like mixed feeling depending on the whose Bay and and yes, what do you see from from your situation? Well, I mean, I think it's probably slightly different, but notwithstanding that, clearly the broader macro trends are quite important, whether they in fact impact interest rates in particular or just the environment from a regulatory perspective, the ability to do deals. I mean, I think, you know, where we're looking, where we're seeing assets, you know, we obviously have a lot of the assets that would be relevant for our type of business are actually owned by private equity and ultimately private equity has a fixed timeline to exit, you know, whilst you can do a continuation fund that only extends to life so much.

So I think, you know what we're seeing is that PE is obviously tried to delay, you know selling assets, you know 324, some of these assets have to be come through in 25. So I think, you know, we're seeing a certainly a decent pipeline of assets out there. I think the question for us is really what is going to be the pricing of these assets is the growing uncertainty in the world, meaning that these assets are going to have to price it less perhaps than they would have say 18 months ago. So I think it's, you know, certainly very interesting times, yeah, particularly for a buyer rather than a seller.

Thank you. Chris, talking about the regulatory environment like how will this regulatory environment evolve to impact deal making in 2025 and and what can deal maker do to maintain compliance and mean this changing standards? Yes. Yeah. I mean, ultimately I think we've all learned to live with it, right? So deal making has just gotten a little more complex over the years. I, I, I remember when I started, I think we always pitch that sell side process takes like from from start to closing like 5 months or so.

I, I think that is currently not reality anymore, unfortunately. And everything has has obviously gotten a lot more complex. Everything has gotten a lot more professional. And a part of that that is also that the regulatory framework has gotten gotten a little more complex and all the times between signing and closing have gotten a lot longer. And I think in the past it used to be always like 3-4 months for 3-4 weeks for for like antitrust approval, but that's it. But nowadays in many situations, you have so many other, other approval requirements depending on, on the target, obviously and another on the buyer.

But, but typically in, in, in many situations, we currently see that between signing and closing, it takes 3456 months. Then we've even had like a situation where it took almost 12 months to get all the, the required approvals. But I, I think it is, it's just key to, to plan for this. All right, So everyone knows that these requirements are there and we just have to, to live with it. We cannot change it and the only thing we can do is we, we can maybe steer a little bit by by choosing the counterparts, choosing the prospective buyers. Consider that when we have like from certain regions, put prospective buyers in the process, it will certainly take longer.

But this is something you, you, you decide deliberately. And so therefore it's it's just important to plan this in your process planet, in your, in your timing and prepare all the approval processes diligently. Thank you, Yens, whose big quick question maybe even more interesting from you for from your Middle East position specializing in, you know in oil and gas, like what's your view? I can only concur to what Yens just mentioned. I mean, it's, and it's in particularly bad in the USA must admit regulation has, has, has stepped up and, and things are just taking much, much longer. Signing is just appears to be, you know, just one step.

You know, it's not this step anymore and, and things have really changed. We, we typically deal with companies that we also have to file antitrust in many, many jurisdictions which prolongs things and almost everything we do is subject to governmental approvals in multiple layers, ministries, regulatory bodies, etcetera, etcetera. So it takes a long time on the positive is typically what we do involves the government one way or another. It's easier that way. But I can also tell you in countries where the government is actually not involved actively in deal making, such as the US, the regulatory bodies are, are really making life difficult.

And obviously with, with the reelection of the GOP and the new administration in the in particular in the US on that side, it appears as if there are some, there's some light at the end of the tunnel when it comes to the ease and speed of deal making. So, you know, it's, it's a big, big hurdle for us always to overcome. It's part of our processes. You know, early education is very, very much required to make sure the buy and sell are both aware what they're getting themselves into and it's reality. And do you see any kind of differences between Geos you're talking about like US versus Europe, like what, what's the are we suffering from increased regulatory in Europe compared to other Geos?

I think all of the indications that we're currently seeing will will lead to that fact. Yes, I can. I can only speak about the industries that I know intimately. Well, I mean, I'll let others comment on other industries, but I can see that, you know, as it relates to our industry, you know, things are just much easier to do in certain jurisdictions, you know, and people are aware of it and then they end up doing a deal in a certain jurisdiction because they know it's, it's easier to close. Thank you, Chris from from your Swiss perspective.

Yeah. I mean, whilst we're obviously based in Switzerland for a worldwide company, so I probably don't have a particular Swiss perspective particularly as I'm Australian as well. But notwithstanding that, I mean I think, you know, we obviously work in a very regulated industry. In any event, being a infrastructure for financial services, you know, I think we can see a significant difference between the Europe and the US in terms of regulation. I think, you know, particularly when you look at just bank regulation, I mean, the US is certainly much lighter than we are in Europe. I think, you know, particularly with the Trump administration, assuming he carries out a number of things he said, I think we expect to see a, you know, even lighter touch regulation in the USI don't see that, you know, the European parliaments or, you know, sort of taking too much note of that and changing their views.

I think we're, you know, stuck with regulation in Europe to the level we have. And I think you know, particularly in somewhere like Switzerland where we've obviously had, you know, a certain bank failure, the regulator certainly from a financial services perspective is unlikely to follow any US lead in terms of loosening regulation. There is like when I was reading the news this morning, like the EU is thinking to potentially simplify ESG reporting obligation. Don't you think like it's going to impact positively like the EMEA market? I mean, it will affect the pricing of ESG companies definitely, you know, but I mean, look, I mean, I think ESG clearly is a very specific issue.

I think, you know, the, the US position on it has been, you know, changing rather rapidly. And I think, you know, clearly a lot of the, you know, depending on perspective progress which was made with ESG will be probably wound back. You know, ESG reporting, you know, from our perspective, it's a, it's something that we do and it's necessary. We have obviously certifications from, you know, various bodies and similarly our issuers follow certain rules. I think it'd probably be, you know, making it simpler is not a bad thing, but I'm not sure it's going to encourage any real deal making. Yes.

From you like mean market perspective, do you see ESG consideration continuing to ship deal making strategy in 2025? I think ESG is certainly not that right. It remains a relevant theme, but I think we've also seen peak ESG for now like 1-2 years ago. So ESG remains one important factor of of deal making, but it's not really the shaping factor any anymore. So certainly companies look during their due diligence into ESG related themes as they've always done. Yeah. And so environmental topics were always important with regards to pollution of soil contamination and these kind of things. So it was, was always part of the due diligence, due diligence and, and this remains an important factor, but I think it, it, it changes again a little bit more to what it was.

So less of a, of a, of a marketing theme, yeah, to just like one important pillar of the company because ESG and, and take soil contamination for instance, it is just also like a super important financial factor. And I, I think it, it goes a little bit more again in, in, in this direction that, that we will certainly need to make sure or many investors will make sure that that there is, is compliance with ESG themes. But as such it it will not make play the decisive, the decisive role in deal making. OK. Who's there?

Maybe like again a different perspective from your side, like what what's the ESG impact on on deal making in your region? So I share the the observations made by the panel and and I would like to add like you know, the the US was the first one to a not subscribe or wound back earlier than than than Europe. And then in all part of the world, you know, it was part of the decision making matrix, but returns and strategic objectives were always the key drivers, right? And, and all clients typically don't have shareholders to report to, right? And and so you know, things were made different, but equally because they don't have shareholders to report to all clients actually went heavily into ESG related projects because they could do it even if the returns were not there.

They were the ones that were are actually thought leaders on, on a lot of things that publicly listed companies can't do. But having said all of that, what I'm experiencing and seeing in particular in, in, in the US as well as in Europe is that, you know, the pressures that some of the companies were under our subsidian, they're nowhere where we used to be. But the momentum is obviously with that of going back to traditional measures of, of, of strategic MNA and, and a substantially heavily weighted return perspective and, and how to and how to make, make it work, considering ESG, but also making sure that it has the weighting that is required for deal making.

And, and not what we saw in 2020 to 2022, which which was a completely different landscape. You saw some of my clients doing doing doing a deal that may have Hanford them strategically, but they wanted to do it because of, you know other reasons and that and that and that deal making or that side of the making has has substantially reduced. So clearly like ESG is a key part of the transaction and you know, for from the intruding's point of view, like we see also like the, the ESG folder within VDR is getting bigger and bigger. So there is much more activity around this topic within this regulatory landscape and you know, and this current environment.

Which sector of industries do you foresee having the most potential in 2025, Chris? Look, I mean, I think for us, I think, you know with the technology, I think as a broad sector, whether it's fintech or other software, whatever, I think we can see a lot of potential activity there. Once again, part of it is driven by the fact that PE needs to monetize, but also the reality is that for a lot of these areas, the, you know, basically fragmented markets and you know, there needs to be consolidation. And I think, you know, from what we see is, you know, particularly in the sort of infrastructure perspective, there's a lot of FS, sorry, financial services, technology type companies that, you know, either need capital or alternately their owners are trying to think of a way to get to the next step.

And whether that's by monetizing or combining with something else, it means there's quite a lot of opportunities out there. Now the question is whether those opportunities are able to be, you know, brought to the fore in 25 and whether people are able to construct deals which actually work at appropriate valuations. Yes, that, that's always the key question. So on your mind, technology will be again like a booming sector in 2025? Yes, what? What do you see from from your perspective? Yeah. I mean taking that question up from a Central European perspective, I, I think we will next to TMT definitively also continue to see a huge number of industrial steels and and Jason services.

So industrial and business services, I think that that's largely unchanged to the previous year where we just see that these companies are under some stress in in many instances. And we see certainly a consolidation necessity and a consolidation trend that will persist throughout 2025 I believe. And therefore this will will also keep us fairly fairly busy from from my perspective. And these are oftentimes really a consolidation trends and therefore yields that are, are, are made between strategics and, and not that much with, with private equity involvement. And yeah, other than that, I, I, I agreed to create the TMT will remain in a very busy sector. I mean, TMT is a clearly a very wide field.

But when we see like the private activity activity and and interest from private equity investors that often times goes in the direction of TMT. So these companies are definitively also a good, a good sale. So good, good, good, good companies to advise because they will find a lot of interest in in the market. So from my perspective, these are the three sectors, TMT, industrial and business services. Thanks. Yeah that, that was already like very active sector the year before energy slash renewable energy was also a very active vertical last year.

Like what's your perspective on on this sector or the other sector was made for for 2025? I mean, I can stop by by reviewing what my colleagues are doing elsewhere and also where we're hiring. And I think I would to concur with the observations of Gens and and Chris, you know, we, we are doing a big push on sort of digital, digital infrastructure assets, right? I mean that's, I think that doesn't come as news, news to anyone. And now that would go into the TNT umbrella and, and, and we've seen that a lot as well. And again, business services, industrials, these are all things I would have put up as well.

And in particular, that's more mid cap space, right where where we see a lot of transaction volume, especially in in the US and, and in Europe when it comes to our sort of, you know, day-to-day sector coverage here, you will see that renewables or let's call it energy is, is under some other pressures when compared to this call it the more traditional hydrocarbons, you know, the for example, or. Gas. In particular, we are expecting a very, very busy market going forward, a lot of. Crazy markets. Yeah, yeah, yeah, they and there was a lot of under investment over the last few years and everybody is just actively going after it, right and and you see it on the headlines of the FT every every other day, right.

These companies are under a lot of pressure to do something and we're expecting a lot to come out of it. We were we expecting large, large cap deals, but just as well like smaller asset deals as well. So a very active market for us this coming year. But to summarize, like digital transformation remains a key driver for 2025. Nothing like stating the obvious big activity in energy and you crazy market in energy still like activity in the tech sector industry or from the main market will be maybe more like in Central Eastern Europe. You know that that's link to everything that we can say like the the main activity sector, tech, energy maybe 1 missing that could be interesting for the coming months will be like the deal within the defence sector regarding the the current situation might be we might be seeing like an increase in in this vertical.

In the in the coming. Months regarding the the IPO market, what's your what's your view on on this market that has been very slow for the last two years? Do you anticipate more companies going public in in 20/20/25? Maybe staying with you? Who's there? Well, I don't know what you're talking about, Mika. I mean, we've, we've had the most active IPO market here in the region over the last 2-3 years. But again, it's completely different, right? You know, the, the motivation here to list all of these companies is by creating the liquidity in the market that historically didn't have liquidity, right.

And it's less driven by motivational factors that that other companies were to list in the US or, or Europe. And we continue to do to see that it started at the bigger markets, so UAE and Saudi and it's now going into Oman. Oman is doing a huge drive into, into privatizing their state owned assets. So we continue to see that and, and it is, it continues to be an active market and and there is a lot of money to be made for financial service providers. So it's, it's a, it's a very active and boring market.

Again, not as active as it was 18 months two years ago, but it's still keeping a lot of people very, very busy. Again, a complete outlier. Yeah. And that of course that's what I meant like a slower market for the Middle East region. I should have prepared my notes a bit better. So thank you. Was very moving to to you Chris, like what what's your view on the IPO market? Yeah. Look, I mean, I think, yeah, clearly 2024 was meant to be a good year for IPOs.

I think it turned out not quite that way. I mean, Sixes in exchange, we had, you know, two of the largest European IPOs last year. This year we've had, you know, one of the largest IPOs as well. I mean there is quite a lot of backlog. There's no question about that. I think, you know, one of the key constraints for people today is valuation and, you know, trying to optimize that, you know, and obviously there is always that differential between Europe and the US. But notwithstanding that, I think, you know, with the level of uncertainty with the US at the moment, I, I think people will just be sitting for a little bit to try and work out, you know, where equity markets are heading in 25.

Because I think, you know, whilst Trump obviously gave quite a nice bump in certain ways, I think there'll be a lot more volatility. And you know, the question is, if you're a new issuer, do you want to be part of that volatility? I agree, like the the first six months of this year would be very interesting and and it's kind of like the Trump administration is kind of fighting all the fights and we see where we go Yens from from your perspective, the yeah. What's your view on the IPO market? Yeah. I, I, I would love to share the enthusiasm of Husbay, but unfortunately I can relate a little more to Chris's answer and and Mika to your question.

So we, there's also our observations that the, the last few years were obviously very, very poor years. I, I do not know exactly, but I think they were like in the German speaking area like just some 4-5 IP OS a year. So that is like really, really, really absolute load numbers like in 2009 or so. So that, that, that has been from an IPO perspective a fairly, fairly poor years. I, I think there is reason to believe that there will be an uptick in 2025 will not be grand years clearly, but there will it I think there is there are indications that it should get better and why, why could that be the case?

I mean, clearly, first of all, stock markets are on, on quite good levels. Valuations, yes, remain challenge, especially in IPO situations, a company that that investors do not know. But ultimately the, the general evaluation levels at, at stock markets are not too bad, first of all. And and secondly, driven by that also investors in, in public companies look for alternatives and if they are like AP OS with with certain discount valuations potentially that, that might be might be interesting cases for, for these type of investors. So therefore we we are positive that this should be a decent year from an from an IPO perspective.

That's very encouraging. Now, if we look at the Geo differences, what emerging market or region should didn't make a keep an eye on for untapped opportunities? Where do you see the best, you know, interest in in the region, Christopher? Probably not my best question to answer on that one, but I think, you know, look, I mean, obviously once again, you know, with the global macro environment, clearly tariffs and tariff wars are you know, certainly the something that people are thinking about, you know, and it may be that in certain jurisdictions, you know, there are some advantages of the tariffs.

So, I mean, look, I mean, I think, you know, potentially if Trump takes a very sort of targeted approach to tariffs, there are certain markets which may escape, you know, whether that happens to be in Latam or wherever. You know, I think, you know, thinking about where is less likely, you know, to be impacted by US, You know, you know, tariffs is probably one thing to think about. That forceful like the tariff will have a huge impact on on on deal making in 2025. Who's who's better? Like what? What do you see like on on on this question?

Well, all the countries I'm currently dealing with, you may consider emerging. So I have to choose my words wisely. But look, we also look after Southeast Asia here out of this office and, and I can tell you we see a lot of interest in the likes of Indonesia and Malaysia. There is, there's actually, you know, a lot of calls that that we're getting on those countries. You know, it's, it's, it's a large population size, lots of demands, everything has to be imported and, and very sort of good looking middle class, you know, they, they making money and they're well educated and, and all the things look quite prosperous.

So you know, if if I was a betting man, I think I think Southeast Asia is, is where we spend a lot of time. Oh, interesting. Yes, From your perspective, what country? Maybe more like an anemia focus? Do you see Activities? Yeah, I mean, it's difficult to say what what's untapped. I think we are living in such a global. World. Right. Yeah, nothing is really untapped. So I think large corporates are already so, so global and so international and know, know their markets really well.

But I, I, I would look like to look at it from a little bit of a different perspective. I think from our experience of the last say 2 years, when, when, when acting on behalf of European companies in, in different roles that we, we've seen that we, we, we currently need to look a little bit more for European, you know, European solutions compared to past years. So the interest for European companies, given the structural challenges that your past has, has decreased. So we see less enthusiasm by US corporates or, or Asian corporates to invest in Europe, not, not saying no interest, but but saying a little less interest. Yeah.

And globally speaking, many, many companies when when deploying capital look rather for dynamic regions of the world, which are currently not, not seen that much in, in Europe. And so therefore for us it's, it's it's less so for for looking for untapped regions, but it's, it's rather more to really closely look for companies. Within Europe as as prospective buyers or or prospective targets, yeah, we see currently a certain trend for in a European consolidation. Don't you think that the current environment will drive like the the enterprise value of European company lower and then maybe attract more like US investors? Absolutely, Mika, that.

That is definitely something we see occasionally, but there are investors from outside Europe that say well valuations are really, really low in in Europe and that there are many opportunities that that is starting a little bit now. On the other hand side, I think that's primarily true in the interests primarily on technology driven companies, European companies that have a good technology that can be rolled out globally. I think these companies remain super interesting for for global investors, while while companies that have no distinct technology technological advantage and might just bring some kind of expansion to the European market are are less of interest given the limited growth potential in in in Europe in the short run.

Thank you. Ian's talking about technology. How how are you currently leveraging AI? And that's, you know, everyone is speaking about AI. Everyone talks about AI. Like. In your in your job and within your company, like how are you currently leveraging AI and how do you envision each shipping deal making now? Like what's the impact of AI in deal making today? Who's there? I don't like that question to be honest. To be honest, I, we, we, we run a very traditional business and, and you know, how do you make it includes like being stuck in a conference room for three straight days with large LLCS and you're not allowed to leave until you get something done.

You know, it's, it's, it's that kind of life. But I do tell you what has changed the, the profiles that the junior bankers provide suddenly sound really good. And, and I think and I, they know, they know how to use, you know, to use that side of, you know, the tools that we have available much better than than I do. Interesting, Chris. Yeah, it's probably slightly different for us. I think, you know, AI, you know, is helpful today. And from a perspective of look, you know, the various things we can do, right in terms of data, we can use AI to interpret data, consolidate data, extract key messaging.

You know, if you've got, you know, like a 300 page IM, some banks produced, not everyone wants to read through 300 pages, let's be honest, right? And so AI is a good way of doing that. Similarly, you know, for contracts, AI is useful for both wants interpretation, but also you know, as we see our legal colleagues are using it to draft. Also it's useful for helping to look for opportunities, you know, particularly in a sector where you perhaps you may not know or there's lots of little companies, it's good for screening. Similarly, you know, for data room, using AI to basically look for stuff in there is helpful.

You know, internally we're running a pilot of, of a, a bot on AI to help us with, you know, M&A, you know, because a lot of things we do for examples, we talk to banks, we talk to PE, we talk to other institutions and consolidating their knowledge is actually something AI is very good at. So I think, look, AI is not going to tell us to go and, you know, do a deal or how to do the deal, but it certainly helps us to inform what we're doing. Yeah. So, so who's very junior are using ChatGPT to provide profile and Christopher junior are using ChatGPT to read the profile of the same company.

So you know, from it's interesting the different perspective clearly where, you know, in all the interaction that we have with clients, it's becoming more and more like something that is that people are talking about them and more than talking like they're really starting to see like or, or think about the strategy and the tool that they should be using and where they should be using it. Yes, in your in your world. Like how much AI is helping you in your in your day-to-day. Yeah, I mean, just keep keeping it brief because I can absolutely relate to what what was bad and Chris just just said, so who's bad?

I, I agree. I mean, we, we share a little bit more the same, the same professional as M&A advisor. And we also see, see that like some Sandbox ChatGPT versions that, that help a little bit here and there in, in, in compiling some, some documents. I mean, that's, that's great. But ultimately, and I think that's also the beauty of the, the job of the M&A advisor. It's, it's just such a wide field and, and a huge part of the, the D it did the work, especially in the midcap space is also about our people and bringing, bringing people together and build bridges and these kind of things.

That is something the AI can as of today, not do. So, so therefore it helps here and there a little bit. But in our work, we do not use it that, that often. I mean, it fairly helps in, in, in, in, in working in data rooms. But ultimately it's, it's just a small part of the business and we see it in the coming months and few years. Definitely more on the due diligence side of things on on the legal side, on the financial due diligence side.

I think they're AI can play a major in a very vital role and and streamline things and and make things a lot, a lot faster and easier. But on the M&A advisors side of things, I, I think at least in over the next couple of years we are still OK. Thank you. And I have a very interesting question in the Q&A that is linked to this AI topic. So the question is how do you see the impact of AI having on our walls within M&A? Many advisors are now using AI to write information memorandum and create buyer list.

Will stuff need to be retrained on all the way up to director and partner level? I can start on that maybe if you, if you like and because I just I think partially answered that one already in my in my previous comment. So I, I do believe that there is is more or using AI tools, a junior banker can produce more output. Yeah. So that will definitely help a junior banker to be more productive. And that means one, one person can can probably do a little more.

And if you want to turn it and phrase it negatively, maybe you do not need as many as many people to do the same amount of work. But I think it's not a not not really a major factor. And I think if I understand the question correctly that that I think gives a really, really relevant point that currently up to director slash partner level, I think that is, is fairly little that the AI can do at the moment. And you, you need to, to train people and have good people with full skill set in order to, to really run the processes and bring people together.

Let's not forget that that's like it really people's business also in the investor side and, and on the, on the seller's side. So they that that type of personal interaction is a very, very important part. And currently you need the intermediary to asset build bridges here. Thank you. Moving to the the last question of this webinar, the the world is evolving. We just discussed about AI all the the geopolitical situation. What do you think? What are the skills that will be the most critical for dealmakers to succeed in 2025?

Was there? Difficult question and I actually want to build upon what Jens just mentioned and, and I think and also the question that you got through the, through the audience, right? And it just goes to the, to the, to the, the gist of things that says like, you know, the our service offering, you know, may become quite commercial or commoditized. Commoditized. That's the right word, you know, and how do you differentiate yourself in a commoditized environment where by a list like your question that you read out is being generated by AI and an information random is written by an AI as well.

My off the cuff response to that would be you hired the wrong bank and the wrong banker. And, and I think, and I hope that's still going to be the case in the next years to come. We differentiate ourselves through relationships and it's, it's so important. And, and that's also why you've seen the, the, the big ramp up of very, very successful and high profile boutiques in our industry, right? I mean, these are veteran investment banks that have done many deals and have a substantial track record, right? And for example, if, if, if Yens is selling a supply of automobile parts in Germany and he's done that three times in the past, you know, I'll hire him to, to sell my 4th company.

And that's, and that's the basic sort of, you know, recipe to success in our industry, right? It's track record in relationships and that continues to be very, very important in what we do. I I think the question was, yeah, go ahead Yens. No, I, I can, I can, I, can, I fully agree to what Hostess just said. And I think that's, that's the core of it. I mean, you need a good network and bring people together. So like find the, the, the, the right buyers for that asset. And there's nothing that ChatGPT can do, quite honestly.

I mean, it just because ChatGPT finds out on the website that there are some, some, some say some overlaps in, in production or in products or whatever, that does not really mean that this is a suitable buyer. And you need also nowadays more than ever at the contacts at the prospective buyers to really address an idea to the, to the core decision makers. So it's really all about about the network and knowing people and experience and expertise in in your geographies and in your industries. So I think was Bear has has hit that the crucial point there. And additionally, I might want to, to add that in order to be able to build up the networks that I just mentioned, I think you need like to make sure that you're honest to your, your clients have proper expectation management and, and be be very transparent to the extent possible and, and really make sure that, that you can establish these long term relationships.

I think that's that's more important than ever before. I agree with both of you. I think also the question was more like the impact of the the people level. I think the expertise, the relationship business is something that is critical for for your industry. But we can't deny or underestimate the impact within the organization with the change of how the business will be run and the impact of the low value task that juniors are doing sometimes and compared to the building the network and the relationship or at the senior level, director level involved. Chris like what's your, what's your view?

Yeah. Look, I mean, I think ultimately senior level network in some ways and experience is absolutely key, right? You don't get the deals, you don't get the knowledge, you don't get insights without having a fantastic network from a junior level. I mean, look, you know, frankly, the AI, et cetera, helps juniors to actually do the work. Ultimately, the path from the junior to the senior really hasn't changed that much. It's just that the tools they're using to actually, you know, create presentations or, you know, information memorandum or whatever, it happens, it just changed, right?

It's a tool. The skills you need as a senior banker or in my case, you know, head of M&A really haven't changed. So you still need to develop all those skills. You know, things like AI are just tools to help you get, you know, help you collate information and get you there. Thank you. We have 6 minutes left and what what we can do is to respond to question asked by by the audience. One that I see that could be interesting for you guys is given the the growing protectionism around the world, do you guys see a threat or any impact on cross-border, cross-border deals?

Who wants to take this one? Yes. Almost everything we do, almost everything we do sorry, and almost everything we do is cross-border. I don't see much change to be honest with you. I I say same here. I mean, we also do do more than half of our transactions are certainly cross-border. And I think it, it, we circle back to the to the initial comments, we, we just have to make sure to have these, these processes factored in and planned in and make sure that everyone is aware of the requirements and, and the timing needs.

So it's nothing that can cannot be solved. It just requires time and preparation and obviously costs money to to deal with. And then certain cases, for instance, if you are in the defense industry in in in Europe or in the US, you would probably not address, I don't know, prospective bias from China, for instance, or Russia or whatever. So this of course something what one has to consider. But in the in the non critical infrastructure type of industries, it is definitively things with a with a proper amount of planning can be can be solved. Thank you, Chris. I mean, I think cross-border is here to stay.

It's not going away. I mean, everything, pretty much every transaction we do except for some clean up transactions in Switzerland are cross-border by the very nature. You know, perhaps, you know, as a general point, there's a bit more uncertainty in the in the environment, but I think cross-border is here to stay and we'll continue to focus on, you know, transactions outside of Switzerland. Thank you. Last question for for the four minutes that we have, I'm reading. So we are talking a lot about dry powder for priority equity, but private equity are being smart in creating some continuation funds secondaries.

How much will be, how much the P industry will influence the deal making in 2025? Are we going to see maybe translate, are we going to finally see an increase in in private equity deal? I mean, I would have thought it's highly, I was going to say, I think it's going to be highly sector specific, right? I mean, you know, in financial, you know, in technology, Cooley PE has an outsized role in ownership of these assets. So I think there'll be much more trades down there. But you know, this is some other sectors. I don't know, I'm not, you know, maybe defense or you know, they're unlikely to have a huge role, right?

So that, that that's the specialization is the, the, the key word. I think deals are opening. These are opening everywhere. There are cross-border deals everywhere that there is activity. The only thing is it's becoming a bit more difficult, a bit more complex, but and you know, bit more specialization and focus on everything that you know, you you're doing in your specific vertical who's very yes, last word. Yeah. I mean, I'm, I'm happy to. So sorry. Go ahead.

Go for it. Yes. No, no, no. Go. OK. So I, I busy, I think I agreed to Christophe and from what we, what we see at the start of the year in, in the processes we run and, and, and additionally also what we hear from the market, we, we do not see any fundamental change compared to 2024, at least here in the, in the German speaking region, particularly Germany, a private activity are still fairly, fairly passive.

I not obviously not meaning that there are no private equity deals, but, but it's definitively less private equity deals than in in previous years. And I, I think private equity investors are, are still a little cautious given the overall uncertainty and, and the fact that the one or the other has also acquired assets in say 2021, for instance, it's fairly premium, premium valuations. And so, so therefore there is private equity activity. Maybe they also the one or the other access of, of, of really good assets will happen. But we we currently at least cannot observe any any major changes to 2024.

Thank you. Who's there? Yeah. Yeah, I can only comment on what I see from my colleagues and and you're the person asking the question did did you know it's a fantastic question. We do see a lot on continuation vehicles a lot. There's a lot of smart ways that private equity is trying to do things. We're seeing a lot in secondaries and, and the reason why you see activity levels changing private equity is also primarily driven by the availability of capital, right. And, and obviously capital, you know, availability and I'm talking third party capital, I'm talking about debt capital now.

Yeah, went down private credit came up to replace it. You see a lot of private credit availability in the US and that market is, is quite active. And once you see more traditional debt providers coming back and doing, doing leveraged buyouts and dividend recaps, you'll see also. Traditional private equity activity, I think hopefully going up in my side of the world, we see less private equity, we see sovereign wealth funds and there again, different, different animals. Different. Yeah, and their and their activity level has come down, completely come down.

Yeah, I think the the question would be how long the DLP that are waiting for the their return or so we'll you know see these continuation funds secondaries happening and what could be the long term impact on, on this private equity industry. Guys, that's we are top of the hour. Thank you very much. Thank you all for for joining us today. We truly appreciate your time and engagements. We appreciate the conversation. A big thank you for to the three of you for them, you know, very good insights. We hope that everyone found the discussion interesting today.

If you didn't get, if we, if we didn't get to your question, apology. We will follow up with you separately and have a great rest of your day. Thank you very much everyone.