“Perhaps our own sector is ripe for consolidation,” according to , chair of Swancap Investment Management, which looks after €4bn in assets under management, and chair of the Luxembourg Private Equity & Venture Capital Association (LPEA).

The PE sector has grown incredibly in recent years and the “rising tide lifted all boats,” stated Mansfeldt. “It also launched all forms of boats. Every wannabe PE [firm] launched themselves over the past decade.”

The comments came during the “GP consolidation: The race for scale” panel during the LPEA Insights conference, organised by the Luxembourg Private Equity & Venture Capital Association (LPEA), on 17 October 2024.

Mansfeldt cited comments that the CEO of Partners Group, which has $142bn in assets under management, made earlier this year. David Layton predicted that the number of general partners (GPs) worldwide would drop from roughly 11,000 to 100 big players within a decade.

Dominique Gaillard, executive chair of Armen, which takes minority stakes in private capital investment managers, pushed back on that prediction. He said that during his time as chair of France Invest, the French private equity trade association, from 2018 to 2021, membership doubled from more than 200 to more than 400 firms. “I don’t agree there will only be 100 big players in a decade,” Gaillard said flatly. He expects more PE firms to continue to be set up, for example, by family offices looking to expand.

‘Stronger in 5-7 years’

Mansfeldt pressed Gaillard on the risk that smaller GPs might “be crushed by the giants.” Gaillard replied that obviously “there will be some consolidation” but his firm invests in GPs that it believes have solid performance, “want assets under management to grow” and “will be stronger in five to seven years.” In addition to checking business plans, they investigate the firm’s “ambiance” because private equity “is a people business.”  

Gaillard said that Armen invests in alternative fund firms seeking, for instance, capital to invest alongside limited partners (LPs) in a new fund that is launching or need to cash out a retiring partner. They themselves exit in the secondary market, selling stakes to asset managers, insurers or family offices looking “to take advantage of the dividend streams.” Occasionally a GP will buy back its stake or Armen sells out jointly with the other partners, “but we cannot trigger a sale as minority shareholders.”