The CEPRES Private Capital Market Outlook for the first quarter of 2020 using the latest data from the CEPRES Platform shows how buyout fundraising in the US declined by almost 50 per cent QoQ and 20 per cent YoY, but is still substantially above volumes during the post-GFC era of 2009 -2012. Buyout fundraising volume in Europe is in stark contrast with a sharp decline of over 70 per cent QoQ and YoY, making it the lowest quarter since late 2017.
US buyout fund net IRR returns declined sharply between 2003 and 2006, which were the vintage years immediately preceding the impending crisis in 2007 and 2008. Vintage year 2009 performance rebounded sharply as the market dislocation did provide attractive opportunities to GPs and funds that did not remain idle on the sidelines as the dust was still settling.
From a fundraising perspective, the Corona Crisis could further impact GP targets and timelines resulting in delays due to changes in LP fund commitment plans.
The full report is available to CEPRES subscribers from: https://www.cepres.com/latest-intelligence
All analysis is generated via investment and portfolio due diligence conducted on the CEPRES Platform by investment counterparties based on live transactional data. More information and further detailed analysis are available to CEPRES clients and upon request.
Dr Daniel Schmidt, Founder & CEO, CEPRES, says: “Funds that own large liquidity reserves will benefit from the multiple decrease and soon start to invest in a market with low valuations and support their existing portfolio companies with larger amounts. In technology and digital sectors, we assume a very fast recovery for companies with revenue models that are independent of the economic cycle or that are replacing business divisions of traditional companies based on technology. In these areas, both exits and investments will quickly pick up again in their activity.”
