🎥 Hg's Martina Sanow - unlocking opportunities to invest in Europe's largest portfolio of software and services businesses

Welcome back to the Alt Goes Mainstream podcast.Today’s episode is with someone who has successfully built a wealth solutions business tailored to her firm’s unique strengths, expertise, and investment track record.Martina Sanow is a Partner at Hg and Head of Hg Wealth, where she is focused on building the firm’s wealth solutions offering built out of the $85B AUM firm, Hg, that invests in enterprise software.Hg, one of the top 10 largest PE firms globally based on the PEI 300 ranking, has built an impressive investment engine focused mission-critical enterprise software companies. The firm has built a portfolio that is a “transatlantic ecosystem of software and services businesses” — representing over $180B in collective enterprise value across its 55 portfolio companies.Martina has been at the firm for almost 16 years. She has been an integral part of building the firm into what it is today, helping Hg grow from $2B in AUM to $85B in AUM, previously as Deputy COO and now building the Hg Wealth business. Hg’s first wealth offering, Fusion, its flagship evergreen fund that provides access to non-US investors to Hg’s private equity funds and co-investment opportunities, has exceeded $1B in NAV just 12 months after its launch.Martina is thoughtful, strategic, and long-term oriented when it comes to building a solution that amplifies Hg’s strengths and resonates with the wealth channel. We had a fascinating discussion about how a scaled specialist like Hg can stand out in the wealth channel, unpacking the essence of who Hg is as a firm and how they’ve expressed who they are as they’ve built their wealth business.We covered:* Hg’s evolution as a firm.* Why Hg focuses on mission-critical enterprise software companies and why it’s a compelling investment thesis.* Building a wealth business that fits the mission, ethos, and strategy of the firm.* Understanding the complexity of evergreen funds.* How Martina and team think about managing dealflow and investor demand in their Fusion fund.* Learnings applied from HgTrust, the publicly listed UK investment trust, to figuring out how to educate and build brand in the wealth channel.* Why does ownership structure matter when it comes to building a wealth business? How being privately owned informs how Hg builds their wealth business.* Why Europe, why now?Thanks Martina for coming on the show to share your wisdom and expertise at the intersection of enterprise software, private equity, and private wealth.Thanks for reading Alt Goes Mainstream! Subscribe for free to receive new posts and support my work.Clip #1: Software is not a sector anymore. What’s the investment thesis for software investing?Clip #2: What are mission-critical software businesses and what do you look for in those businesses?Clip #3: Why and how to build a wealth business?A word from AGM podcast sponsor, Ultimus Fund SolutionsThis episode of Alt Goes Mainstream is brought to you by Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.Visit www.ultimusfundsolutions.com to learn more about Ultimus’ technology enhanced services and solutions or contact Ultimus Executive Vice President of Business Development Gary Harris on email at [email protected] thank Ultimus for their support of alts going mainstream.Show Notes00:00 Introduction and Message from Ultimus, our Sponsor01:18 Podcast Opening Theme01:55 Introduction to Today's Guest: Martina Sanow04:48 Martina's Journey at Hg: Detailed Discussion04:55 Hg's Growth and Specialization05:20 Hg's Entrepreneurial Culture06:15 Building a Wealth Business Aligned with Hg's Culture07:22 Importance of Cognitive Diversity07:48 Building a Diverse and Effective Team13:21 Hg's Entrepreneurial Culture and Learning14:34 Specialization in B2B Software15:01 Focus on Mission Critical Software17:59 Hg's Investment Criteria20:14 Case Study: Visma21:49 Investing in Europe: Challenges and Opportunities30:10 Hg's Wealth Business Strategy38:02 Balancing Demand and Deal Flow38:15 Investment Team Orientation38:33 Fund Strategies and Co-Investments39:11 Managing Quarterly Subscriptions39:40 Growth and NAV Management40:19 Balancing Wealth and Institutional Demand40:33 Privately Owned Firm Benefits41:20 Realization Committee and Evergreen Structure44:11 Liquidity Management Challenges47:41 Institutional Investors Adopting Evergreens49:16 Retail vs. Wealth Investors50:51 Listed Trust and Wealth Business52:14 Building the Wealth Business54:10 Strategic Importance of Wealth Capital56:45 Innovation and Partnerships in Wealth Space01:00:29 Brand Building and Education01:02:29 Software as a Core Investment01:04:47 Community and Founder Investments01:07:26 Software Summit and AI Immersion01:08:20 Value Creation and Network01:09:16 Portfolio Synergies and Acquisitions01:10:37 Future of Wealth Business01:11:11 Favorite Investment: Fusion01:12:05 Investing Alongside Clients01:12:59 Conclusion and Final ThoughtsEditing and post-production work for this episode was provided by The Podcast Consultant. Join over 11,800 Substack subscribers & followers who are thought leaders and executives from top private markets firms and wealth management like Blackstone, Apollo, Ares, KKR, EQT, Carlyle, Blue Owl, CVC, TPG, Brookfield Oaktree, Vista, Goldman Sachs, J.P. Morgan, BlackRock, Fidelity, iCapital, Franklin Templeton, Nuveen, Hg, Permira, Stonepeak, Hightower, Focus Financial, Cerity Partners, and more. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit altgoesmainstream.substack.com