Tech PE Investing
Do you think given obvious tailwinds in tech for decades to come, the most lucrative/best sector in PE over the long-run is going to be tech? I am thinking about going to an area that is less competitive, but PE is very saturated I assume across sectors.
I am trying to think about what sector to pursue combining general sector interest and long-term tailwinds. Would love to hear thoughts.
I agree that Tech has had a multi-decade tail wind already and those are likely to continue.
Healthcare has similar tailwinds given aging population and advances in medicine, trends to outsourcing.
Financial Services is another large sector that taps into growing wealth tailwind (leading to purchase of financial products).
On the other hand, I think consumer discretionary or commodity exposure or energy investing can be more cyclical and less appealing based on how you are thinking about this.
Thank you
Yes
Yes, it is. But you have to figure out whether you're really passionate for it and whether you will be comfortable looking at tech businesses for >12 hrs a day. The main PE industries (tech,B2B services, industrials, healthcare, consumer) are not going anywhere. They're all good. I like Industrials because they are physical products.
IMO - Value Tech will be the next frontier to focus on. I've seen so many Upper MM funds (think Audax and Gryphon) that were legacy industrials or business services hire a Principal/Director level person to lead their software efforts. These individuals have put capital to work at peak multiples and bought some very questionable businesses.
These are going to be tough assets to exit, but there will be inherent value for a vertically-focused aggregator to gobble up a bunch of sub-scale assets and exit to a nice strategic or a sponsor upmarket.
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