It is too early to tell whether the equity market declines and volatility since early August will have a lasting impact on private equity markets, says Hans Markvoort (pictured), head of private equity investment solutions and general manager of listed fund of private equity funds Castle Private Equity…
It is too early to tell whether the equity market declines and volatility since early August will have a lasting impact on private equity markets. In the next three to six months M&A activity will be an important theme for the Castle Private Equity portfolio. Some reduction in exits can be expected as the IPO window, used to support the exit of venture investments, appears to be partially closing. However, sales to trade buyers should continue due to the substantial cash reserves many corporations have built up over the past few years. In addition, private equity funds have financial and managerial capacity to allocate, as their current investments have reduced their risk profiles significantly in the past two years.
Over the next one to two years, there are certain regions, for example Asia, and industries, such as technology, where we expect continued profit growth of our underlying companies. Turbulent markets can provide good investment opportunities for the discerning investor and Castle’s Private Equity investment capacity will be used to pursue such opportunities.
