S&P Global Market Intelligence’s Post

We analyzed 13 years worth of #PrivateEquity earnings calls for you. Read our latest research to discover what's top of mind for PE executives. #NLP #textualdata #AI #sentiment #privatecredit

We analyzed 13 years worth of #PrivateEquity earnings calls for you. Read our latest research to discover what's top of mind for PE executives. Key findings: • PE sentiment hit near-record highs in Q1 2024 • Less focus on inflation, rates & liquidity • Growing emphasis on private wealth & credit • AI discussions doubled YoY, targeting portfolio enhancements Read the full analysis below. #NLP #textualdata #AI #sentiment #privatecredit

If resurgent equity markets have struck you as puzzling, you're not alone. From Eric Uhlfelder's Global Investment Report: "Current market sentiment that sent the S&P 500 up more than 15% during the first half of the year may be blurring what actually is going on. If corporate profitability can rise along with higher interest rates, then all is well. But that would be highly unusual. An equity rally isn't sustainable if corporate earnings are contracting. That's what we're seeing, suggesting a growing disconnect between hard macro evidence and investor sentiment." https://lnkd.in/gWr-iZTg

Equity investors need to re-think their strategies: https://lnkd.in/e9MzsfTs. Discover a wealth of knowledge on the latest developments concerning equity markets and key sectors at Savvy Investor. Morningstar recently argued that the U.S. equity market may not be too expensive—depending on what metrics one uses. This is true of every stock market around the world: the data can be read in different ways. However, what matters to allocators focused on their equity exposure is what sort of risks may materialize, and when. This selection of timely insights provides allocators with a wealth of knowledge on the latest developments concerning equity markets and key sectors. #equity #equityinvestors #strategy #equitymarket #stockmarket By... Baillie Gifford, CME Group, FTSE Russell, An LSEG Business, MFS Investment Management, Robeco, Northern Trust Asset Management, PGIM Quantitative Solutions, Morgan Stanley Investment Management, Capgemini & Federal Reserve Bank of New York.

Five key trends in private equity exits from our latest research report. Read the full report: https://lnkd.in/eVquRqAc 1) Downturn in Private Equity Exits: There was a -27% decrease in private equity exits in 2023, marking a 12-year low. This trend reflects a broader contraction in M&A activity in private markets, largely attributed to disconnected valuations between buyers and sellers amid a landscape of higher interest rates. 2) Strategic Shift in North American and European Markets: In North America, private equity firms are increasingly holding onto their investments longer (7+ years), anticipating future valuation rises. This is a departure from the quicker exit strategies (3-5 years) seen in previous years. Conversely, in Europe, ongoing geopolitical uncertainties and negative investor sentiments are prompting a more cautious investment approach. 3) Adaptation in Asian Markets Amid Economic Challenges: Despite facing economic distress, Asia, especially China, saw an uptick in private equity exits. This suggests a deliberate pivot by firms to reduce their exposure in the region, possibly as a response to challenges like declining consumer spending and a looming real estate crisis. 4) Sectoral Shifts in Exit Patterns: The technology sector, once dominating the landscape of private equity exits, experienced a decline in its proportional share of exits in 2023. This indicates a broader diversification in investment strategies, with firms possibly holding onto their tech investments for longer due to their potential for high growth. 5) Anticipation of Increased Exit Activities in 2024: An uptick in exit activities is expected in 2024, driven by the maturation of a large volume of investments from the buyout boom in 2021. This potential increase is further influenced by the growing demand for liquidity from LPs, which is likely to shape the deal-making landscape significantly in the upcoming year.

Myth Demystified #1: Public Markets vs. Private Equity (VC or Early-Stage Funds) When it comes to investment returns, the debate between public markets and private equity has long been a topic of discussion. Contrary to popular belief, recent data suggests that public markets have often outperformed private equity. Key Insights: - Private Equity Focus: Many P/E funds prioritize financial leverage over operational efficiency, leading to high exit valuations driven by financial strategies rather than sustainable growth. - Public Market Investment Focus: Public markets emphasize financial growth and stability, with strong performance rooted in sound operational fundamentals. The Reality: Prominent VC funds boasting returns in the 16-20% range often compare themselves to large-cap indices, presenting a potentially misleading picture. VCs enter at micro-cap valuations but benchmark against large-cap indices, skewing perceptions. Entry vs. Exit Valuations: - VCs enter at ₹100-500 crore (micro-cap) valuations and exit at small-cap levels, contrasting with the large-cap benchmark of ₹50,000-70,000 crores. - Public Market Performance: Small-cap funds in public markets have seen returns ranging from 16-28%, thanks to a bottom-up investing approach that delivers substantial returns even at the exit stage. Investors should look beyond the allure of online data showcasing private equity's superior returns. Public markets, focusing on growth, stability, and bottom-up stock picking, present compelling opportunities for robust returns.

We believe the U.S. middle market continues to offer private equity investors a more attractive opportunity set versus the large- and mega-cap market. Find out why in a new article from the Investment Research team: https://bit.ly/3yps1en

📈 Equity Markets Show Resilience in 2023 🚀 As we venture deeper into 2023, equity markets have showcased their resilience, delivering an overall positive performance. Yet, it's important to note that this buoyancy has been largely driven by a select few stocks, with valuations on the rise. The fascinating part? The increasingly stark differences in sector performance are revealing potential opportunities for active managers to shine. But that's not all—after weathering a challenging start to the year, the fixed income market has become a more appealing prospect for investors, adding an interesting dimension to portfolio strategies. Navigating these market dynamics requires skill, experience, and a keen eye for opportunities. Here's to a year of resilience, adaptability, and seizing opportunities in the ever-evolving world of finance! 🌟📊 #EquityMarkets #FinancialResilience #InvestmentOpportunities #FixedIncome #FinancialAdvisory #MarketInsights #LondonFinance

Private Equity Trend Report 2024   Highlights include: A brighter outlook for 2024. Despite continued geopolitical concerns, inflationary pressures and high interest rates, 51% of respondents expect their firms to increase the number of new investments they make. GPs are sitting on a wealth of dry powder and are ready to put it to good use.   Competition intensifies. 71% of respondents agree that competition for investments among PE firms increased in 2023 compared to 2022, with one-fifth saying it significantly increased. Dealmaking may have slowed, but fund managers are vying for the most sought-after companies, which are showing growth regardless of sluggish GDP forecasts.   Buy-and-build in vogue. In the face of elevated financing costs for large platform deals, PE firms are looking to buy-and-build strategies to drive synergies, cross-selling opportunities and scale. Indeed, 77% say buy-and-builds will be an influential factor in their equity stories this year.   Moving in on manufacturing. 36% of respondents expect to allocate more capital to the industrial production/manufacturing sector over the next few years.   ESG demands rise. ESG factors are taking on greater importance. As a result, 43% cite increased ESG expectations as the number one changing demand among their investors, and 34% point to improved disclosure in ESG reporting. LPs are clearly an important driver of change in this area.   Data analytics infiltrates due diligence. Data analytics and artificial intelligence (AI) are transforming how PE firms evaluate investments, with 87% already using data analytics for due diligence and target identification. Furthermore, 33% of respondents identify data analytics as the single most crucial area for their digital investment. #privateequity https://lnkd.in/djS4hazn

In this recent ausbiz interview, Jonathan Crone, Portfolio Manager - Multi-Asset at Insight Investment discusses with Nadine Blayney the unexpected strength of #equity markets despite rising #yields, attributing this resilience to robust #economic growth.    He points out a global surge in earnings and emphasises the importance of diversifying equity investments, with a particular focus on Asian markets. Crone also highlights promising opportunities in both the #technology sector and undervalued areas.   Watch the full #interview at the link below. #InsightInvestment https://bit.ly/4aMHYsm