Publicly traded equity is not the only investment to have taken a beating over the last six months; private equity firms are struggling to cope with declining institutional investment rates, a tough operating environment, and a lack of exits from even the best companies in their portfolio.
Private equity investments may be a small portion of most institutional investment portfolios, but many managers find themselves over-allocated in an illiquid asset class. It may be time to recap what has happened recently in the world of venture capitalists, mezzanine financiers and leveraged buyout experts. So Benefits Canada is pleased to present an overview of the most relevant issues of the past few months.
The Private Equity Meltdown: Apportioning Blame
Many publicly traded public equity companies are trading far below their opening price when they went through an initial public offering in the heady days of 2007. Perhaps that’s just as well, suggests one private equity executive. Read More.
Private Equity Firms Batten Down the Hatches
The global economic downturn is forcing private equity firms to wait out the storm, as the exits have slammed shut for even their best companies. Conserving capital is the name of the game, as institutional investors turn off the taps. Read More.
The Private Equity Cycle: Start Up or Buy Out?
History suggests that venture capital and leveraged buyouts move in alternating cycles; when venture capitalists are doing well, the LBO crowd is lagging, and vice versa. With many institutional investors over-allocated to private equity, timing an exit is crucial.
Foreign VCs Retreat in 2008
Investment in Canada’s venture capital market reached a 12-year low in 2008, as foreign investors slashed the amount of cash they were willing to invest in Canadian start-ups. Read More.
Case Study: How a Deal was Done
Despite the pall that hangs over private equity, there’s still life in the marketplace as some transactions get done. They target growing firms with low levels of debt. And they’re willing in invest in a tough environment. Read More.
Privately Speaking
Private equity is an asset class that can provoke strong reaction from current and potential investors. It is one of the few assets classes where there is a persistence of returns among top quartile managers. It is also one that often maintains an information advantage that can be exploited for profit. Read More.