Recession impact on PE
Obviously a recession/economic slowdown will hurt PE portcos, but how will it affect jobs and hiring at funds?
I’m an associate at an UMM and we have seen a big slowdown in terms of the number of books we get sent and a tough financing market. Less deals means less capital deployed and a smaller fee base.
Is anyone concerned about their job security? If the firm needs to trim off some fat, who will go first?
Not sure how funds handled this during 08.
If anyone has insight would greatly appreciate it.
There is reason to be optimistic still
Management Fees do not go down it’s fixed for quite a while as noted above. It’s an incredibly resilient business model.
Yep, fixed management fees mean layoffs are very unlikely. Deal flow always slows down when things are uncertain and I bet will pick up significantly in the next 3-6 months once there's some more clarity on the macro environment either way.
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