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Bailey McCann, Opalesque New York: A new survey from BDO suggests that private equity fund managers are changing the ways they think about creating value in light of tougher financial conditions.
According to BDO's 2023 Private Capital Survey, four-in-five (79%) fund managers and operating partners surveyed expect assets to trade higher in the next six months. When asked where they plan to direct the most capital during that time, they identified "applying equity relief to portfolio companies" as their number one priority.
"With continued economic uncertainty following more than a year of rising interest rates and the increased cost of capital, fund managers remain focused on prioritizing their companies hit hardest by the soaring cost of debt and operations," said Matt Segal, national partner - PE Assurance. "Funds that strike deals in today's environment are making sure they have a clear path to creating value that isn't dependent on rising equity markets."
This year's survey also confirmed that deal risk is changing.
Fund managers and operating partners cite risk exposure uncovered during due diligence as the primary challenge to closing deals in the current environment.
Despite overheated rhetoric, private equity managers are still looking closely at ESG concerns. More than 80% of fund managers and operating partners report they have turned down an investment opportunity because of ESG concerns. This finding suggests ESG risk may be a leading in...................... To view our full article Click here
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