2012 Private Equity & Venture Capital Conference

2/24/2012 - Despite the swirl of sour fiscal news, there’s hope — and it lies in venture capital, according to Peter Barris.

“The global economy is screaming for growth, and no vehicle is comparable [to the venture capital industry] when it comes to economic growth and job creation,” said Barris, a venture capitalist and keynote speaker at the 2012 Kellogg Private Equity and Venture Capital Conference on Feb. 15.

Winds of change?

The private equity industry is poised to thrive in the coming decade, said Barris, managing general partner of venture capital firm New Enterprise Associates. In some ways, today’s climate resembles 20 years ago, he suggested, including high unemployment, polarized politics and palpable doom-and-gloom. People then didn’t sense we were on the verge of one of the most robust times for venture capital. The same could be true now, Barris said.

“Venture capital has always been a cyclical industry. Everyone knows that. But it seems everyone has trouble remembering that when we are at the bottom of a cycle,” Barris said.

Critical pieces are meshing, creating opportunities for transformation, he explained. These include:

• Infrastructure, connectivity, global markets and a need for growth
• Equilibrium between capital supply and investing opportunities
• High-caliber talent and the best group of entrepreneurs out there
• Tools to do more with less

The ones to watch

Barris pointed to key sectors well-positioned to spur change:

• Biopharmaceuticals, driven by scores of unmet medical needs, an aging population, and an emerging global middle class
• Healthcare services, where rapid economic growth is fueling increased demand in India and China
• Enterprise IT, driven by the so-called consumerization of IT, and trends such as cloud computing

Enterprise IT is a “sweet spot” for NEA, Barris said. It may be the most promising area in the company’s portfolio in the years ahead.

Bon French ’76, also a keynote speaker, shared Barris’s optimism about venture capital’s future, and noted that private equity is experiencing global success. French, CEO of Adams Street Partners, said governments around the world are embracing this model of capitalism and innovation. And they’re realizing it creates wealth and jobs.

A fresh perspective

Kellogg students at the conference said it was helpful to hear from experts like Barris and French.

The practical perspective from those in the field nicely supplements the lessons in the classroom, said Michael McLachlan ’13.

Matthew Monson ’13, meanwhile, appreciated hearing the latest about venture capital. Any investor would want to know the trends venture capital experts are focusing on, Monson said; without a forum like the conference, it can be difficult to get this information.