Is it possible to be unaffected by the pandemic?

  • Blackstone has released a statement to confirm that the outbreak will impact the performance of its funds
  • Temasek (a Singapore-based firm with c.42% of its investment in private markets) expects salary and annual bonus cuts
  • Goldman Sachs revised the 2020 growth forecast for S&P 500 earnings to zero
  • Fundraising: PE and venture capital (VC) firms reported fundraising of USD595bn in 2019 (40% more than the USD426bn raised in 2014, of which North America and Europe accounted for USD342.9bn). PE fundraising has been badly affected amid the current global travel restrictions.
  • Portfolio monitoring: General partners (GPs) are now actively involved in managing their portfolio holdings, to keep track of each company’s performance and analyse the impact the outbreak may or may not have on them.
  • Due diligence: Travel restrictions have affected GP-led activities such as company-level due diligence.
  • Deal making: New deal making has been impacted by travel restrictions, with GPs currently focusing on mitigating the impact of COVID-19 on their existing portfolios.
  • Company valuation: With China being a global supplier, the closure of many of its factories has disrupted the supply side of a number of companies and, in turn, their sales figures.
  • PE exits: PE exits, whether via IPOs, buyouts or acquisitions, have been impacted as PE firms that have spent years on grooming their portfolio companies, hoping to exit through an IPO or buyout, have put such exits on hold.
  • KKR has postponed its plan to sell Singapore-based Goodpack (a shipping and logistics company), owing to a dip in its valuation since the outbreak (the proposed deal value was USD2bn)

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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Acuity Knowledge Partners

Acuity Knowledge Partners

We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/

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