|
Laxman Pai, Opalesque Asia: New research suggests that the coronavirus could have impacted private equity firms as the buyout fundraising in the US for the first quarter of 2020 declined by almost 50 percent QoQ and 20 percent YoY. However, it is still substantially above volumes during the post-GFC era of 2009 -2012.
Buyout fundraising volume in Europe is in stark contrast with a sharp decline of over 70 percent QoQ and YoY, making it the lowest quarter since late 2017, said the CEPRES Private Capital Market Outlook for Q1 2020.
US buyout fund net IRR returns declined sharply between 2003 and 2006, which were the vintage years immediately preceding the impending crisis in 2007 and 2008.
The vintage year 2009 performance rebounded sharply as the market dislocation did provide attractive opportunities to GPs and funds that did not remain idle on the sidelines as the dust was still settling.
From a fundraising perspective, the Corona crisis could further impact GP targets and timelines resulting in delays due to changes in LP fund commitment plans said the report.
"Funds that own large liquidity reserves will benefit from the multiple decreases and soon start to invest in a market with low valuations and support their existing portfolio companies with larger amounts," Dr. Daniel Schmidt, Founder & CEO, CEPRES said.
"In technology and digital sectors, we assume a very fast recovery for companies with revenue models that are independent of the economic cycle...................... To view our full article Click here
|
RSS
