GIC, Singapore’s sovereign wealth fund and one of the world’s largest institutional investors, believes that private equity’s golden age of high valuations, lower leverage costs and low interest rates is at an end and won’t be “coming back any time soon”, according to a report by The Financial Times.
GIC, Singapore’s sovereign wealth fund and one of the world’s largest institutional investors, believes that private equity’s golden age of high valuations, lower leverage costs and low interest rates is at an end and won’t be “coming back any time soon”, according to a report by The Financial Times.
The $700bn fund, which is one of the largest backers of buyout funds, said the new era of higher interest rates and volatility had created challenges.
The report quotes Chief Investment Officer Jeffrey Jaensubhakij as saying that: “Many of the things that were tailwinds for the private equity industry have come to an end”. And referring to the availability of assets at reasonable prices and investors willing to invest he said: “Today, unfortunately, there’s both a supply and demand problem.”
The advent of this new era hasn’t put GIC off the asset class, though, with Chief Executive Lim Chow Kiat reportedly saying that the fund could increase its private market exposure over the coming year if the right opportunities are available.
“If the market offers more opportunities, certainly we will direct our capital accordingly,” he said.
