Register  
Market ripe for private equity
Thursday, 29 March 2012 11:40am

Institutions deleveraging to shore-up balance sheets is leading to a buyer's market for private equity, according to one provider.

"In Europe alone the banks need to deleverage their balance sheets by 1.5 to 2.5 trillion euros," said Reto Schwager, head of investment solutions, Asia Pacific at Partners Group.

"They have to offload a lot of their private equity holdings from their balance sheets and someone has to buy these."

Speaking at the Adviser's Big Day Out Investment Manager Roadshow yesterday, Partners Group urged advisers to consider the asset class, which has previously been the domain of institutional investors, particularly given its out-performance of public markets.

The robust secondary market in private equity portfolios is burgeoning as a result of the de-leveraging and is creating good opportunities for investors, according to Schwager.

"This secondary market is a big market - it's a US$70 billion market. $70 billion of private equity portfolios came back over our desk in 2011 alone," said Schwager.

"Globally the banks have started to dispose of their private equity holdings but have only sold about a third, so around two thirds are still to come."

The supply/demand mismatch means buyers of institutional private equity portfolios can dictate price as well as pick and choose bits of an existing portfolio in a way that was not possible five years ago, Schwager said.

This approach to capitalising on secondary market value should be part of a relative investment approach whereby commitments by primary, secondary and direct means are evaluated regularly and adjusted accordingly, Partners Group believes.

In 2007 at the outset of the GFC, private equity commitments by Partners Group Global Value SICAV were at 45% in primary, 55% secondary and none in direct. This shifted entirely to 93% secondaries in 2009 and 7% in direct.

In 2011, the firm finished the year with 31% in primary, 42% in secondary and 27% direct investments.

Blogs
Follow the industry experts.
Christopher Page
Christopher Page
Managing Director

The age of SMSFs
The growth of the number and volume of self-managed super funds (SMSFs) seems to have no end. As the sector reaches the one million ...read more
 
Benjamin Ong
Benjamin Ong
Chief Economist

Reflation, rotation and the taper
'Tis being my final type (drivel, to some gentle readers) for the year, we'll take a look back at the 2013 that was to seek the lessons ... read more
 
Alex Dunnin
Alex Dunnin
Director of Research & Editorial Services

BRUMBIE: Walk quietly but carry a big stick
It's now a few weeks since Financial System Inquiry (FSI) chief David Murray handed down his interim report and already sectional advance ... read more
News Search   
VideoBrought to you by
Who wants to be a RockStar 2014 Highlights
Count's Chris Mekhail was crowned 2014 Rockstar this year for his soaring rendition of Swedish House Mafia hit 'Don't You Worry Child' at the annual Who wants to be a RockStar event organised by the Finance ... Watch video
AMP Capital Australian Equity Concentrated Fund
We invite you to watch our latest video program on FSiTV featuring AMP Capital's Co-Head of Australian Fundamental Equities Gian Pandit, as interviewed by Mark Smith, deputy editor of Financial Standard. In ... Watch video
Platinum Asset Management
Reflecting on more than three decades in the industry, Platinum Asset Management managing director Kerr Neilson says one of the changes in the industry has the been the erosion of the information advantage ... Watch video
MAX 2014 Highlights
The annual MAX forum places all the movers and shakers in financial services when it comes to sales, marketing and distribution. Find out the recipe of those who are taking the lead. Watch the video n ... Watch video
Get it
Daily
FREE to your inbox, get the Financial Standard Daily Email.
Get the Free
iPad app
Download the Financial Standard iPad app for FREE
Industry
Events
SEP
03
SEP
10
Risk and Liquidity Forum
11
Liability Driven Investing Forum
OCT
07
Major Market Players Symposium
15
Investment Performance Measurement, Attribution & Risk Management
20
Family Office Forum
News
Bites
Advertisement

$245 (inc GST) for 1 year
 
 
Copyright © 1992-2014 Rainmaker Group
All material on this site is subject to copyright. All rights reserved. No part of this material may be reproduced, translated, transmitted, framed or stored in a retrieval system for public or private use without the written permission of the publisher.
Link to something iCs0Unam