In the first 11 months of 2021, private-equity (PE) firms sealed over 13,000 deals globally, worth a combined $1.8trn—more than in any previous full year. Will the bubble burst?
THE BEST pauses in music are those that are least expected. As a banging tune nears its crescendo, just a second of silence, followed by a return of the beat, can send a dance floor wild. Such is the effect covid-19 has had on private markets. In March 2020, when lockdowns sent DJs home everywhere, the beat suddenly stopped. But the pause did not last: after a tepid 2020, this year has been positively revelrous.
Private assets were once so obscure they were called “alternatives”. The label seems absurd today. Private-capital firms manage a record $10trn of assets, the equivalent of 10% of total assets globally . This includes several types of activity. PE—which consists of taking over companies using debt, juicing up profits and reselling them at a premium—promises racy returns. Infrastructure and, to some extent, property help diversify portfolios.
With capital markets open for initial public offerings, a virtuous circle of activity is taking place: private-capital firms can sell more of their existing assets and return the proceeds to their ultimate investors, who in turn are keen to participate in fresh fundraising for private markets. For Blackstone, for example, the biggest firm of all, asset sales, cash returned and funds raised so far this year have all been roughly double the level of 2020.
Lured by high returns, some investors are keen to be more directly involved in running private assets, rather than being passive customers of the big private-capital managers. APG, a Dutch pension manager that oversees $703bn, aims to own at least 10-15% of every fund it backs, so as to negotiate veto rights over strategic matters, says Patrick Kanters, its private-markets boss.
Norge Siste Nytt, Norge Overskrifter
Similar News:Du kan også lese nyheter som ligner på denne som vi har samlet inn fra andre nyhetskilder.
‘Proceed with caution’: here's what Wall Street analysts see for the U.S. stock market in 2022The recent spike in market volatility may herald a bumpier U.S. stock market in 2022, as investors come to grips with an inflection point in monetary policy...
Les mer »
Why are companies mandating a return to the office in 2021?Insider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Les mer »
These 6 overvalued stocks are making the S&P 500 look more pricey than it really isOPINION: Apple, Amazon and Alphabet will not dominate the stock market in a decade’s time. That's because stocks that top market-cap rankings usually underperform on average over the next decade.
Les mer »
Biden rips Kellogg's for replacing workers on strikeInsider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Les mer »
Amazon warehouse in Illinois collapses with 100 workers inside - 'mass casualty incident''Mass casualty incident' at Amazon warehouse in Illinois after roof collapses due to severe weather trapping 100 workers
Les mer »
Expect to see discounts and deals in 2022, consumer expert says2021's wild price increases will soon give way to 2022's year of discounts, according to the economist who's studied the American shopper for decades
Les mer »