It has never been a better time to be in alternative assets. In 2019 so far, the growth in private capital markets continues to outpace fixed income and public markets worldwide; it is an exciting and inspiring space to be in. Preqin tracks the key news stories of the week that got us reading, thinking and talking. Please note, some of these sites may require a subscription to view the article.
Upstarts challenge private equity top tier
The $5.6bn buyout of Athenahealth catapulted Veritas Capital into front-page news worldwide. Having teamed up with activist hedge fund Elliott Management on one of the biggest private equity deals of 2018, the New York-based buyout firm joins half a dozen once-obscure private equity players that have broken into the industry’s top tier, capable of writing large equity cheques and competing for coveted assets with the likes of Apollo, Blackstone and KKR.
Why private equity appeals
Fortune favours the bold. Despite perceived higher risks and longer horizon lock-up periods, private equity has proven to many investors across the risk appetite spectrum that its gains are worth the venture. A new paper from AQR Capital Management shows that returns on private equity-backed buyouts of US businesses outperformed the S&P 500 Index of large companies by an average of 2.3% a year between 1986 and 2017.
Source: The Economist
Almost half of private equity firms see a correction this year
This week, market sentiment gauged by Preqin’s latest private equity fund manager survey points to an overvalued M&A sector: 44% of surveyed fund managers see a correction coming in 2019, 11% predict that a correction is imminent, and 33% feel one is likely over 12 months.
Source: Private Equity News
China’s CDH Investment targets $1bn for VC growth capital funds
China’s economy might be faltering and its debt burden growing, but private equity firms are continuing to invest and its venture capital scene is growing at breakneck speed. This week, CDH Investment, with more than $17bn in AUM, is reportedly looking to raise almost $1bn for USD- and CNY-denominated funds managed by its venture and growth capital arm, targeting the healthcare and logistics sectors.
Brexit: Nordic pension funds reveal their approaches to UK assets
With the impact of a looming Brexit as uncertain as ever, the world's largest pension funds evaluate their asset exposure to the UK market. The majority of pension funds in Finland and Sweden do not take specific country views, but most are fraught with the challenges of assessing the risks of an uncertain outcome.
BlackRock’s bid to become a private equity giant is behind schedule
The world’s biggest money-manager, BlackRock set a goal of raising at least $12bn to buy and hold long-term stakes in companies, replicating the approach of Warren Buffet, but has yet to receive a single cheque. Despite its success in the exchange-traded funds and index funds market, the slow fundraising suggests BlackRock is facing challenges operating in the less familiar territory of private equity.
Source: Financial News London
Never before has the fate of hedge funds turned on so few stocks
Hedge funds have been backing away from the stock market despite its dramatic rally at the end of 2018, but perhaps they believe they already have the right stocks in the bag. Prime brokerage data from Goldman Sachs and JPMorgan shows hedge fund clients have yet to embrace the equity rally, and net leverage, a measure of risk taking, sat below the 30th percentile in a 12-month range.
PREQIN IN THE NEWS
eVestment Private Markets Group partners with Preqin
This week, eVestment Private Markets Group announced a data partnership agreement with Preqin. The inclusion of Preqin’s private capital fund benchmarks within eVestment Private Markets complements eVestment’s existing performance analytics and market intelligence tools and expands the due diligence and research capabilities for private market GPs, LPs and advisors.
DealCloud integrates Preqin data with DataCortex
DealCloud, a specialist in CRM and deal management technology for the capital markets, has partnered with Preqin to integrate Preqin's data with DealCloud's DataCortex product.
Source: Private Equity Wire