September 05, 2024

Alternative Realities: Private equity challenges and opportunities

15 minutes

Watch the video version on YouTube.

2020 and 2021 were banner years for the private equity market as fiscal and monetary stimulus boosted fundraising, deal and exit activity. More recently, however, macro uncertainty and higher interest rates have put a damper on the asset class, which is highly dependent on leverage. Still, better-than-expected economic growth has supported recent performance. As companies, particularly in the Technology sector, wait longer to IPO, private equity has become an increasingly important way to get exposure to the high growth potential of early-stage companies. For decades, investors have used private equity to supplement their public equity allocations, enhancing returns, reducing volatility and providing access to secular market trends.

Dr. David Kelly is joined by Ashmi Mehrotra, the Co-Head and Portfolio Manager within the Global Private Equity Group at J.P. Morgan Asset Management, to discuss the trends and investment opportunities she’s seeing in the asset class.

Time stamps: Introduction (00:00), Types of PE investments most focused on (1:00), Secondaries and Co-investments (1:32), Sectors and types of companies (6:59), Implications of slowing M&A and IPO activity (10:42), What dynamics are going to drive PE activity? (11:59)

Resources:

For more resources on Alternatives, visit our Guide to Alternatives and Principles of Alternatives Investing

Listen to the audio version of the Alternative Realities podcast: Apple Podcasts | Spotify

Subscribe to the Notes on the Week Ahead podcast for more insights from Dr. David Kelly: Apple Podcasts | Spotify

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