June 3, 2021
Private Equity Review
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Private equity is an attractive asset class offering differentiated cash flow in a segment of the market expected to grow 2-3x that of the broader market.
Institutional, Endowments and Family Offices remain committed to private equity, with the majority expecting to either increase or maintain the level of current allocations.
Two primary risks to private equity are elevated valuations and higher leverage ratios. While the former may act as a headwind to returns, the latter should help boost returns, albeit with more risk.
Firms making use of advanced analytics, including big data and web-based analytics appear better positioned to meet the challenges of an evolving market.
Sector specialists are the fastest-growing segment of private equity as value creation depends more on deep industry knowledge and anticipating where the industry is headed.