Anna Ellis: And I know you've mentioned it before, but when we talk about deal activity, a $20m investment check is quite different to say a much larger one. When you talk about the increased deal activity, do you see the opportunities across the board or perhaps more opportunity in certain segmented areas of the market? For example, lower market or larger market.
Michael Lukin: Yeah, I think that's a very good question and I think it'll be different for different segments of the market. So the of family sub a hundred million dollars enterprise value business, family owned, founder owned, wanting to take some bit of money off the table looking for growth equity to capitalize on weakness in their competitors. I think we'll see people looking for growth equity in that environment to help them grow their businesses to consolidate their market position to grow as they feel like the economy may bounce back in kind of 2024 - 25.
So, I think that you'll see more activity in the growth equity space as people have more conviction around the economic outlook and so willing to take on a partner to grow their business.
I think at the larger end, I think the IPO window will obviously be relevant for bigger private equity shops. So, the IPO window generally opens early in the economic cycle. I think we'll see potentially a few more IPOs this year than we saw last year. Not that it would be that difficult given there weren't many at all of scale. So I think we'll see more of that kind of activity.
And then I think generally we'll see more direct secondary style deals where private equity will sell to other private equity driven by two things. One is a lack of distributions over the last twelve months from a lot of private equity firms. And the magic dust on cap raising is always giving investors back. It's always easier to get more money out of your investors after you've just given them a cheque back. And I think as private equity firms are looking to raise their next fund, they look through their book of portfolio companies and they'll say, what can I sell to kind of create liquidity for my investor base so that I've got more confidence around my capital raising next time round.
And then on the flip side, in terms of buy side, there's a whole bunch of private equity firms that didn't do much last year, probably behind on their investment pace on their 2021 vintage funds, 2022 vintage funds, looking to start to increase the velocity of capital raising or capital deployment over the next year or two as they're building out their most recent fundraise and how they invest that fund. So I think it will be different for different parts of the market, but generally, there will be more activity across the board on the back of more confidence, more conviction around the outlook.