Private equity back to basics

For much of recent history, investors in private equity could benefit from several supportive tailwinds – especially low interest rates that made leverage efficient, and bullish market sentiment that helped valuation multiples expand. But we are now in a new era – one in which persistently high inflation is keeping rates high, and in which geopolitics and other macro concerns are weighing on deal appetite.

So does this mean that private equity has ceased to merit a place in portfolios? Not in our view. Rather, the message from this new era is that investors must be more selective and managers must add value in different ways. In this video presentation by Maurizio Arrigo, Global Co-Head of Private Equity at Pictet Alternative Advisors, we explain how.

We trust this will demonstrate that if private equity managers get the basics right, they should thrive even if the new era is more difficult than the old era. And if the new era is relatively short lived and the market improves, they should truly excel.