In a recent fireside chat, Rodolfo De Benedetti, Partner and Vice President of the Board of Directors at Decalia Capital, shared his expert views on the evolving landscape of private assets, investment strategies, and key market considerations. With a distinguished background in finance and family business, Benedetti’s insights offer a unique perspective on the dynamics of private markets.
A Family Legacy and the Birth of Decalia
The Benedetti family’s entrepreneurial journey began in the 1970s with the founding of their holding company, where Rodolfo later assumed the role of CEO. Ten years ago, Benedetti made a pivotal career move by stepping down as CEO to establish Decalia, a Geneva-based wealth and asset management firm. Under his leadership, Decalia has emerged as a significant player in the private assets space, particularly focusing on private credit since 2015.
Private Asset Trends: A Balanced Approach
Benedetti highlights the importance of blending top-down and bottom-up approaches when navigating private assets. He notes the rapid growth in private capital, which has led to both overvaluation and undervaluation within the market. Decalia’s strategy centers on identifying niches where capital holds greater value and collaborating with teams that possess a proven track record and deep domain expertise.
“We want to work with people that have both the competence and the instinct to be investors,” Benedetti remarks, emphasizing the need for a thoughtful and disciplined investment approach.
The Importance of Track Record and Due Diligence
Selecting the right investment teams is crucial, according to Benedetti. He underscores the significance of a strong track record, leadership with a vision to build a sustainable business, and a commitment to talent pool diversification. Red flags for Decalia include reputational issues, lack of transparency, and a focus on short-term gains.
“Reputation is very important. It’s not just about being honest; it’s about the way you treat people,” Benedetti asserts, highlighting the ethical considerations that guide Decalia’s investment decisions.
Aligning Interests: A Key to Success
Alignment of interests between investment teams and investors is a cornerstone of Decalia’s philosophy. Benedetti believes that investing the firm’s own capital in its products ensures that all parties are working towards the same goals. Incentives at Decalia are structured to reward performance, aligning with the long-term interests of investors.
“Alignment is very important. We start with ourselves, and we invest our own money in our products,” Benedetti notes, demonstrating Decalia’s commitment to shared success.
Focus on Private Credit: A Strategic Choice
Decalia’s portfolio reflects a strong emphasis on private credit, a sector that has gained prominence in recent years. Benedetti explains that private credit offers compelling risk-return opportunities, particularly in today’s market environment, where traditional banks have retreated from lending activities.
Key Takeaways for Investors
- Growth in Private Credit: The expansion of private credit is a significant trend, driven by the search for yield and the withdrawal of banks from lending.
- Importance of Alignment: Successful investment requires aligning the interests of investment teams and investors, with a focus on long-term performance.
- Due Diligence: Rigorous research and due diligence are essential when selecting investment teams and opportunities in the private assets space.
- Balanced Approach: Combining top-down and bottom-up strategies is critical for navigating the complexities of private asset investing.
Rodolfo De Benedetti’s insights offer valuable guidance for investors looking to navigate the evolving landscape of private assets, emphasizing the importance of strategy, alignment, and ethical considerations in achieving long-term success.
