François Masquelier (ATEL), Claus Mansfeldt (LPEA): Common ground for success
François Masquelier and Claus Mansfeldt, respectively Chairman of ATEL and President-elect of the LPEA, discussed the common ground they share between the treasury and Private Equity professions at the CEO Lunch organised by 360Crossmedia on the 11th of July.
Could you please define treasury and private equity?
François Masquelier: Treasurers oversee all the client relationships – rating agencies, investors, financial institutions etc. - for the corporations they represent. They are in charge of cash and liquidity management, financial risks such as FX, interest rate and equity. The scope of the profession has really increased over the years, moving from cash management to central treasury – inhouse banking – in which treasurers fund, hedge and protect our affiliates.
Claus Mansfeldt: Private Equity (PE) is the private ownership of companies. It is typically concentrated ownership and, in most circumstances, directly controlled investment – together, the main difference with publicly owned companies. Another arm of our association is venture capital – which is not always control-investing, but still private and equity-based.
“Both professions face common cash issues – especially with negative interest rates and the value destruction entailed.”
What do both professions have in common?
CM: Treasury is an embedded activity of corporates. As we invest in corporates, common fields of interest automatically appear. It goes without saying that both professions deal with large numbers and financial data. Attention and obsession to details, as well as optimization, characterize the two activities. Risk awareness is the other cohesive factor. Risk is a very acute component in PE via leveraged buyouts which imply more financial risk on balance sheets during the holding on the PE journey.
FM: Regulations remains a common concern. FATCA, EMIR (Refit), MiFID2, PSD2, and KYC have been impacting both our activities. ATEL is currently working on a local solution on KYC and is open to dialogue and different solutions to simplify the work of our members. Treasurers are also facing market volatility in different countries, a clear concern for the two industries. Cash management is another issue. PE is a short-term borrowing industry, while treasurers borrow for longer. However, both professions face common cash issues – especially with negative interest rates and the value destruction entailed – factors that are necessary to mitigate.
“Attention and obsession to details as well as optimization characterizes Private Equity professionals and treasurers”
How can ATEL and the LPEA collaborate in future?
FM: ATEL sees clear value in such collaboration. On the banking side, the account officer is not only in charge of corporates but can oversee family offices and PE/RE funds. An additional axis of collaboration is related to sharing experience when influencing regulatory bodies at local and European level - OECD, EFRAG, EU Commission and DG’s, etc. - where most decisions are taken. Our experience gathered over the past 13 years through the European Association of Corporate Treasurers has proven successful when influencing regulatory institutions. Finally, we also need to work together with Luxembourg actors – ministries and industry associations – to keep on promoting the Grand-Duchy as a strong financial ecosystem, not only for funds or the financial industry, but also for corporates.
CM: There are indeed grounds for collaboration for both associations as every aspect of our jobs are becoming increasingly complex. We need to leverage combined knowledge of the changes in the financial infrastructure to find beneficial alternatives. To quote one of my members, “If there is any chance you could help us find positive interest on current accounts, they will pay for lunch.”