POWERED BY MOMENTUM MEDIA
Are PE-owned firms a better choice for hard times?
Private equity-companies have some structural advantages that allow them to navigate crises better as they have access to equity and debt capital from their sponsors, expertise from managers and active owners, according to Willis Towers Watson.
The firm, which surveyed several of the private equity managers at the end of Q1 2020 to understand how their businesses were performing and what their expectations were for the next 2-3 months, found that while the first half of the year saw market volatility and a subdued environment for exit deals, investors should not forget that managers maintained significant flexibility over the timing and terms of company exits.
“So far, we have seen little evidence of forced exits into a depressed market and long-term investors who are patient can ride out any short-term volatility,” the firm said in a note.
“Strong, cash-generating businesses are typically favoured by our managers and we focus on those with strong operational skill as this is a key tool to add value.”
As far as sectors were concerned, technology, healthcare and consumer staples were the areas still worth capital deployment, despite the short-term dislocation.
At the same time, long-term PE investors should remain disciplined and continue to deploy capital in line with their programmes and investors considering the asset class could be facing one of the better periods to invest in the past decade.
Recommended for you
The mega fund has announced a $2.2 billion investment in a leading data centre platform, bringing its global real assets portfolio to nearly $60 billion.
In this latest edition, Australian Retirement Trust’s head of global real assets Michael Weaver explains the fund’s approach to finding new opportunities as it surpasses $300 billion in funds under management.
Fund managers remain hopeful for a Chinese revival story despite the “disappointing” stimulus package announced this week.
In this latest edition, Darren Spencer, lead investment director at Mercer, shares the fund’s process in assessing opportunities in a shifting investment landscape.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
