Hi,
How is the current environment for PE investments, considering topics like Brexit (first decision made), Corona virus, upcoming elections in the US etc? Is it a risky envorinment full of uncertainty?
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Lucky you, in 2 days you will get the answer: https://www.bain.com/insights/events/superreturn-2020/contact-us/?gclid…</a">Bain PE report 2020
Thank you very much. Do you have an opinion on this (given your range of super helpful comments on this forum? Are PEs currently focused on anti-cyclical assets ?
Answer is yes and no, PE funds will buy assets where they see value. Any cyclical is definitely a theme for PE funds right now BUT, that makes these assets expensive. Seen quite a few chemical deals although they are very cyclical companies but they bought these at cheap multiples thus are attractive relative to other assets.
I would say fairly risky. EBITDA is at alltime high for most companies, while in the meantime multiples are up too. People are scared of recession/global crisis. Well established PEs however are still buying cyclical consumer businesses (maybe also due to asset scarcity). In the end, if you are an established fund, you just keep buying and raising and through the cycle you will make your money (on carry or even management fee if you're big enough).
https://www.bain.com/insights/topics/global-private-equity-report/</a">Bain PE report has been published as is the https://www.mckinsey.com/~/media/mckinsey/industries/private%20equity%2…</a">McKinsey PE report
Awesome, thanks for the headsup. Figure 1.5 is pretty crazy. If something bad happens and rates go up things will turn sour really quickly.
Also, not sure about you other EuroMonkeys but my personal experience is that the multiple increase is primarily from green/tech/ecommerce. Most other sectors seem to stay the same.
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