PE investors expect a ‘U-shaped’ recovery, says Mazars

Coronavirus U-shaped recovery

PE investors expect a ‘U-shaped’ recovery, according to ‘Covid-19 and the world of private equity: optimism in an uncertain environment’, a survey released today by audit firm Mazars, that gauges investor sentiment in the institutional funding market. 

While the majority (63 percent) of respondents still anticipate a U-shaped recovery - compared to 82 percent in June - the number of respondents expecting a V-shaped recovery has increased from 10 percent to 27 percent - likely on the back of vaccinations starting in Q1 2021, in combination with business support schemes being implemented by governments. 

Meanwhile, around 70 percent of respondents report seeing more distressed opportunities, according to the research. This figure compares to 54 percent of respondents in June saying they had come across distressed opportunities. 

Despite expectations that revenues will fall over the next 12 months, participants in the survey view the decline as less severe than previously reported. Some 30 percent of respondents expect a fall in revenue of 11 percent to 25 percent, compared to 50 percent of respondents in the June 2020 survey. A little over one third, or 39 percent, of respondents said they focus on originating new platform opportunities. 

“The second edition of our survey confirms and reinforces the sense of optimism for which the private equity community is known," says Stéphane Pithois, global head of M&A, Mazars. 

"In an uncertain environment, investors have proven resilient and are seeking new opportunities in the immediate term, while expertly settling into remote working conditions. If the political environment remains more settled and capital continues to be made available, then we can expect private equity to actively remain on the lookout for investment opportunities.” 

Conducted in December 2020, survey respondents are from the private equity and private debt landscape primarily in Europe as well as Asia, North America and South America.