It is a clear win-win. GPs can customize the deployment and portfolio construction of their funds — particularly crucial in a limited exit world – juggling concentration risk and extending the deployment of their existing vintage. Likewise, LPs get access to advantaged deal flow in a highly cost-effective structure with the potential for outperformance. LPs […]
We resume our discussion of the private equity liquidity crunch and its impact on fundraising, this time from the LP’s perspective. The supply/demand imbalance in the fundraising environment has shifted to favor LPs. This gives them greater GP access, longer diligence windows, and more negotiating power with LPA terms. But many LPs, their investment programs […]
A successful track record of investment exits is always a given, but doing so today is essential to attract new LP commitments. Timing is key – entering a fundraising cycle with recent realizations proves a manager can navigate a challenging market and generate realizations even in tough conditions. Featuring recent exit activity and distribution-to-paid-in (DPI) […]
In recent years, private equity secondaries have bloomed from a cottage industry, extending back to the 1980’s, to an essential part of the private equity ecosystem. For much of the market’s existence, secondary transactions carried an unsavory stigma. Sellers were seen as distressed, and the resulting sale signaled the end of the GP/LP relationship. Neither […]
Challenging financing conditions and macroeconomic disruptions have ushered in a period of lackluster M&A activity the last few years. Sellers are reluctant to realize investments at what are perceived to be depressed valuation multiples. Buyers meanwhile are wary of overpaying and unwilling to meet sellers at multiples of a bygone era. The resulting valuation gap […]
What remains to be seen are the longer-term, structural impacts of the distribution dilemma. We expect that investors who pull back from the asset class will miss out – as we have seen play out in other market disruptions. Out of current market complexity will emerge clear winners and losers. For LPs in particular, those […]
Capabilities live within a culture. The right mindset is required to react effectively to disruption. Unfortunately, many organizations lack the sense of urgency. This works against them. Why? Because extinction is slow. It takes decades to lose market share. With C-suites and employees consumed with day-to-day work, strategic decisions get postponed. A timely question remains: […]
What are the biggest surprises for investors this year? Our informal polling among top credit managers produced five answers. First, muted M&A activity, despite improved conditions for financing. Second, is the strength of the economy. Though rates have been high compared the zero-gravity era that ended in 2022, consumers keep spending and companies keep hiring. […]
Experience matters. Leaders with years of navigating through many economic, business and market cycles have learned how to shake the shock and ride the wave of change without losing their balance. Yes, the risks of falling are greater. And failures can have consequences beyond the local or regional, as CrowdStrike demonstrated. But so are the […]
Consistent with remarks from conference panelists, pension plans are looking at more niche private credit strategies to achieve diversified return profiles. Examples include secondaries, NAV financing, ABL, distressed, and real estate debt. In part, this is because the sheer number of managers that name private credit as their focus makes it challenging to navigate. ▶︎ […]