Private Equity Outlook
Analyst thinking about the long-term/next move and was wondering people's thoughts on PE vs HF vs PC vs Tech GE vs VC in the years going forward (eg: 5-10 years)? Hard to predict obviously, but trying to think how the principal and up economics/asset class will change? Beyond the end of carried interest at caps gain rate.
Every day there is a new VC and PE firm and so just trying to think what's best. Too much dry powder in my opinion and not sure about PE.
I think the bullcase for PE/VC sector overall is pretty strong. Pension funds have required return targets that are likely to need increasing private equity exposure.
While there is correlation between public and private valuations, PE still has components such as sourcing, value creation, higher leverage that are difficult to replicate in listed markets and to internalize.
This doesn’t stop poor performing funds from not raising the next fund.
Between PE and VC, my guess is that VC is probably more exposed to a downcycle in valuations (as more "growth" factor vs traditional PE I see as more "quality" or "value" factor). VC also tend to hold for longer time periods on an unrealized basis.So could potentially go to probability of carry realization.
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