As we approach the half way mark of 2019 we take a look at what’s been happening in the private equity industry so far this year.
Volatility returned to the markets in the final quarter of 2018 and persisted through into 2019. This sparked concern that equities might slip into a bear market after years of unrelenting growth.
Any disturbance in equity markets creates opportunities for private investors, as both institutional and retail clients look for buying opportunities.
The top growth sectors for 2019 are split between the technology sector and the consumer industry and there are many interesting investment themes emerging.
For growth capital focused PE firms, technology spending has increased and as a result the need for product expansion and geographical diversification is very much needed, presenting a huge opportunity.
For value focused PE firms across the globe, real estate is still the weapon of choice, as firms look for value opportunities from under-priced assets.
The need for asset diversification is becoming increasingly common, with the industry’s largest operators Blackstone Group, the Carlyle group and KKR all being major advocates.
At Berkeley Assets we continue to choose asset-backed businesses and real estate as our core value creation tool, but supplement our portfolio with investments in the technology sector for growth opportunities.
While there is unlikely to be a shortage of companies and assets to purchase in 2019, the level of dry powder (unspent capital) that exists globally across PE houses remains at record levels. This is due to the huge influx of capital seen over recent years, combined with overheated valuations that persist across the globe as the bull-run market fire continues to burn.
At Berkeley Assets, we continue with our tried and tested strategies and focus on yield generating asset back businesses with intrinsic value to preserve capital.
Our size gives us tremendous dynamism and flexibility as we can pick and choose projects and assets that fit our strict investment criteria. Larger PE firms, on the other hand, are under pressure to make huge acquisitions in order to utilise their cash reserves and satisfy the demands of investors, limiting the options available to them.
If you have any questions you would like our team to answer, contact us at any time, we’d love to hear from you. Visit our Contact page today.