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Private Equity Strategies

Insider Trends: Capital Deployments Increase, Deal Size Ticks Up

Monday, May 20, 2013

By: Bailey McCann, Private Equity Strategies

Leaders in both alternative investments and geopolitics gathered this month at the Skybridge Alternatives (SALT) Conference in Las Vegas, Nevada. During that conference, a number of key players in the private equity industry outlined trends in private equity ranging from distressed opportunities to real estate. I spoke with Ingrid Pierce, Global Managing Partner at Walkers, about trends she sees in the private equity space.

“More capital is being released now than we saw for several months there, allocations also remain strong and that’s good news,” Pierce tells Private Equity Strategies. “People are closing deals, and that’s good psychologically.”

At Walkers, Pierce focuses on advising fiduciaries and representing major institutions, fund managers, directors and trustees in all aspects of investment funds, including structuring and ongoing operations. She notes that across all of the groups she works with optimism is growing, albeit cautiously.

“Deal sizes are creeping up. The tried and true formulas for private equity and fund structures are leading the way here, and we may start to see club deals come back, but at a slower pace.”

She echoes points made in our Dealmakers Q&A about growth in the secondary markets. “There is growth in secondaries in both hedge funds and private equity. I think we are getting a better picture of those investments now that we are further away from 2008. Similar activity is happening in real estate. That market has been cleaned up to some extent and there are real opportunities there.”

Despite growth in investment opportunities, private equity funds should still keep an eye on regulation, Pierce notes. “I don’t think there is an appreciation of regulation and what the consequences will be, especially for smaller firms. Part of the reason for that is that those problems will be in the future, but firms can’t wait to react.”

Between AIFMD in Europe, Dodd-Frank and FATCA in the US, private equity firms are now faced with new regulatory challenges, and often, new registration requirements. “FATCA is huge and all encompassing, firms will have to look at who is liable for those reports. Individuals are going to have to put their name on the line for these numbers, that is going to give some people pause, and it should. Firms should be having these conversations now.”

This article was published in Opalesque's Private Equity Strategies our monthly research update on the global private equity landscape including all sectors and market caps.
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