Trends in Private Equity
As repeatedly pointed out, we’re living in what is believed to be the most challenging business environment ever faced with market dynamics that repeatedly alter, therefore recognizing the key trends in private equity is critical:
1. Making sure investments made between 2005 – 2007 are sustained and the invested companies are in good shape enough to come out of the great recession as strong as possible. Obviously, asset prices and valuations were much higher in 2006 and 2007 than they are now, so some of those companies were the focus to turnaround.
2. Emerging markets are growing much faster than developed markets and so capital will follow the area’s of fastest growth, companies are investing more and more in that direction like China, India, Turkey and Brazil.
3. Last year the investing strategy in the US focused on finding opportunities in distressed companies or distressed investors; but this year is focused on traditional buy outs because the credit markets have rebounded and there are some very good companies out there which are seeking private equity investment.