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Alternative Market Briefing

Majority investors expect a negative 2020, but improved sentiments in longterm

Friday, May 29, 2020

Laxman Pai, Opalesque Asia:

65% of alternative fund managers expect GDP to shrink by at least 3% in their focus markets this year as a result of the coronavirus pandemic, said a survey.

With the coronavirus pandemic shutting down segments of global economies, many of the respondents to a survey identify as being a general partner or investment fund manager, expect the GDP growth of their focus market to contract this year.

"This is not a surprise since the majority of respondents focus their investments in the U.S. and European markets, which have both been severely impacted by the virus," said most of the private equity and private debt fund managers participated in the survey.

According to the Duff & Phelps Survey: Impact of COVID-19 on Investment Valuations, the majority of respondents (65%) expect COVID-19 to cause GDP growth in their key markets to shrink by 3% or more this year. Meanwhile, 33% of respondents expect contractions of 1% or 2%. Approximately 2% of respondents expect their market's GDP growth to contract by just 0.5%.

However, when viewed over a longer timeframe, this sentiment improves. When asked about how GDP growth could be impacted going into 2021, the majority of respondents (55%) expect the virus to have a negative impact of just 0.5%. However, 11% of respondents still expect the pandemic to have significant impacts next year with 3% or more contraction to GDP growth.

When respondents were asked to determine the most important facto......................

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