The private equity (PE) landscape is likely to change in the post-Covid world, with distressed strategies expected to see the greatest rise in transactions, according to a new report from Intertrust.
More than nine out of 10 PE professionals surveyed by Intertrust expect to see a rise in the volume of distressed fund transaction activity over the next 12 months due to the impact of Covid-19. Yet almost half (46%) believe that mismatches in valuation expectations between buyers and sellers will restrict deal flow.
Guernsey is a specialist centre for servicing private equity and the island's financial services firms work with some of the world's biggest PE managers.
Intertrust's Managing Director in Guernsey Marie McNeela said that this experience in the funds would ensure PE remains an active area for the local industry.
"There's no doubt the landscape has changed and our results show that PE professionals are cognisant of that," she said. "But the results also demonstrate confidence that capital will be invested and distressed strategies are likely to be a key area of focus for managers.
"Both Guernsey and Jersey have huge experience in end-to-end fund administration and that proven quality, coupled with continued growth of the Channel Island funds industry, is likely to result in a continued growth of our PE business.
"Combine this growth with Intertrust's emphasis on technological solutions and you have an offering that meets exactly the criteria that our report tells us PE professionals are looking for."
Intertrust, a global leader in providing tech-enabled fund and corporate solutions, interviewed 142 private equity professionals across Europe, North America and Asia to identify the risks and opportunities facing the industry following the coronavirus pandemic.
The research was carried out against a backdrop of record levels of dry powder - Preqin reported at the start of the year that PE cash ready for investment rose for a seventh consecutive year to some $276 billion in 2019, triple what it was in 2012. It is therefore perhaps unsurprising that many respondents predict a rise in opportunities and potential deals. Four-fifths (79%) say that lower valuations present a buying opportunity for active investors.
The full Intertrust Global Private Equity Outlook 2020 report is available here: https://www.intertrustgroup.com/our-services/global-private-equity-outlook-report-2020
The role of private equity is the focus for the final webinar of Guernsey Sustainable Finance Week on Thursday 11 June. Register here: https://event.on24.com/wcc/r/2366265/08A06F87CF4D49CFCE0D9AAA5A0091C5/1077468?partnerref=website
For more information about Guernsey's finance industry please visit www.weareguernsey.com.
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