We conclude our series on the Private Equity liquidity crunch with this question: What do scarce realizations mean for LPs constructing a portfolio in today’s environment? Having reviewed tactical tools and strategies available to investors to find liquidity, deploy capital, and select managers, we turn to building a sound and profitable portfolio.
Every limited partner is unique, but they have commonalities when it comes to assembling a long-term PE portfolio for the long-term. Consistency, balance, and matched goals and outcomes are always important. But what happens to that portfolio in a capital-constrained world with depleted cash in-flows?
✒︎ From the Editor: The Lead Left will be on break until the week of January 6th. To all of our readers, best wishes for a safe, healthy and restful holiday season.
“They may go on hold after December.” – Brian Levitt, global market strategist, Invesco.
Featuring Charts
Chart of the Week: Interest Bearing Accounts
After three flat-to-down years, LP’s look to be gearing up for 2025. Source: Private Equity International’s LP Perspectives 2025 Study
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Chart of the Week: To Co-Invest, or Not to Co-Invest
The majority of GPs in Europe and North America offer equity co-investment programs. Source: Dechert’s 2025 Global Private Equity Outlook. (Past performance is no guarantee of future results.)
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Chart of the Week: Bigger Brothers
Since 2020 the share of GPs raising larger funds has been growing. Source: PitchBook(Past performance is no guarantee of future results.)
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Chart of the Week: No Money-Back Guarantee
The absence of realizations has hampered distributions to LPs. Source: Burgiss/MSCI(Past performance is no guarantee of future results.)
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Chart of the Week: Secondaries on the March
The growth of equity secondaries is fueled by both LP and GP liquidity needs. Source: Jefferies(Past performance is no guarantee of future results.)
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Chart of the Week: On Holds
In the absence of M&A activity, PE portfolio companies are held for extended periods. Source: PitchBook(Past performance is no guarantee of future results.)
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Features
Private Debt Intelligence – 12/16/2024
Top ten private debt funds hoover up 60% of capital in 2024 Read more in ‘Preqin 2025 Global Report: Private Debt’ The trend of capital consolidation in private capital continues unabated, with emerging managers finding it increasingly hard to raise funds as the vehicles raised by the most-well known and largest managers have drawn in…
Middle Market & Private Credit – 12/16/2024
NAIC Report Puts Smaller CRA Ratings Under the Spotlight Click here to learn more. At end-2023, US insurers held about USD350 billion of privately rated securities. The NAIC has adopted a proposal to contest private ratings from CRAs if their ratings are three notches higher than an assessment from the NAIC’s Securities Valuation Office (SVO)….
The Pulse of Private Equity – 12/16/2024
Oil & gas fundraising activity Download PitchBook’s Report here. Of the six oil & gas funds to close through Q3, three funds raised over $500 million. The largest fund, Carnelian Energy Capital V, raised $975 million, followed closely by EnCap Flatrock Midstream Fund V on $931 million, though this was well below its $3 billion target…
Leveraged Loan Insight & Analysis – 12/16/2024
CLOs ramp to new heights in ’24, new issuance tops US$186bn thanks to bustling November US CLO new issuance totaled US$25.2bn across 54 vehicles in November, marking the busiest month of the year and the second highest monthly tally on record for the asset class…. Subscribe to Read MoreAlready a member? Log in here...
PDI Picks – 12/16/2024
Private debt’s emerging manager problem New GPs face a tough task to attract investor interest, but there are ways of maximising prospects. It feels somewhat Scrooge-like to point it out at this time of year but, for emerging managers, goodwill appears to be in short supply. In our LP Perspectives study – to be published…
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Subscribe to Read MoreAlready a member? Log in here Related posts: 2H 2021 Midyear Outlook Report State of the Capital Markets – Fourth Quarter 2016 Review and
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
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