ESCP ALUMNI magazine - Special Issue 2022 - 95

Investment & Finance
Business Life
A unique financial advice
and investment firm
Nicolas MOTELAY (87), Managing Partner of New End, tells us about this financial
advice and investment company founded in 2018 by five ex-Oaktree Capital
partners. New End now employs 16 people located in London, Paris, Milan, Zurich,
Montreal and New York. Interview.
Nicolas MOTELAY (87)
Managing Partner
What is your core business?
New End (NE) has opted for a " principal
investor " and even a " merchant banker "
approach, and this explains our close
relationship with our sponsor clients,
and the alignment of interests valued
by investors when they weigh up our
investment opportunities.
As a matter of fact, NE co-invests in the
transactions offered to its clients, and
offers financing solutions to sponsors.
NE is not a placement agent acting as a
simple intermediary. This profession is
likely to miss out on the sea change being
experienced by the alternatives sector.
Our business focuses on three areas and
three strategies:
* Primary Funds and Capital Formation,
Direc t
Inve s tment s and Cap i t a l
Solutions
* Credi t, Pr i vate Equi ty (PE ), and
Real Assets (including property and
infrastructure)
Who are your clients?
NE is faced with a commercial anomaly:
service demand exceeds supply. Although
capital is plentiful, it is being sought by
a growing number of sponsors, with a
diverse range of strategies. Leveraging
capital is very challenging, which is borne
out by increased demand.
Our business model is based on selecting
the right
sponsors , regardless of the
industry. When raising primary funds,
being able to say no, having a limited
number of mandates, and differentiating
are vital in order to avoid the copycat
strategies that are over-represented in
allocations.
Consequently, we have several " firsts " in
our assets: a European " Triple Net Lease "
fund since 2018 (Leadcrest); a PE team
incubator fund (FS or GP) (Opera), and a
PE Maritime fund.
What is a Fundless Sponsor (FS)?
The only difference from a GP is the
lack of a vehicle and de facto capital.
However, being a FS is not a barrier. The
teams, know-how and track records are
equivalent. The transaction pipeline is
the same, and even better, as it is free
from the cons traints of a fund. We
know where the capital willing to invest
alongside a FS is located, and on all counts
they replicate the advantages of a fund
(transaction fees covered and guaranteed
capital availability).
What is the sea change
that you mentioned?
Co - i nv e s tme nt
(CI)
and accountability. They enable astute
management of sectoral allocat ions ,
multiples paid, portfolio composition,
and, in short, the risk taken.
There's no shortage of opportunities:
on a regular basis, defectors from classic
funds set up FS teams and the existing
ones are teeming with ideas that the
classic GPs seem to be unaware of. CI
is at the core of the FS model, and some
GPs use it as a loss leader to encourage
investors to purchase primary funds.
However, the pivotal moment will be
the acquisition by a FS of an asset worth
several bi l l ion exclus i vely financed
by co- inves tors, in the face of GP
competitors. Likewise for the other asset
classes. It will then be time to reassess
the relevance of the GP-LP model of
current primary funds. Could this be a
further sea change?
h a s
It enables
be come
a st rat egy in it s e lf in al t e rnat i ve
management .
investors
to
reduce the funds' share and even halt the
primary investment, and replace future
commitments with direct investments.
All those involved increase their profile
ESCP Alumni Magazine Special issue ❙ 2022
❙ 95
ESCP ALUMNI magazine - Special Issue 2022

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