Private Equity Moris Beracha Wuani

By Andrew McAuley After a period of good returns from equities and bonds and with the official cash rate at 1.0 per cent, many investors are looking for ways to reduce risk and diversify their portfolios. Adding alternative investments such as private equity is one way to do this. Alternative investments are any asset other than stocks, bonds, and cash, and which can act as building blocks to diversify portfolios. Hedge funds, commodities and real estate are all considered part of the alternative investments universe, as is private equity. Investors should aim to build a self-financing private equity portfolio that has sufficient distributions to cover future capital calls. Private equity funds take equity stakes in companies or assets that are not publicly traded and work closely with the management teams to increase their value to be able to sell again at a higher price. Thus, by their nature they are less correlated with equity and bond markets as...

Bruce Flatt put Wall Street’s biggest private equity players on notice that the Canadian juggernaut was coming for them three years ago. The head of Brookfield Asset Management Inc. told Bloomberg Television then that his firm -- pushing into private equity -- should be mentioned in the same breath as Blackstone Group LP , Carlyle Group LP and KKR & Co. It was an unusually brash statement from the understated Winnipeg native. He’s more than backed it up. On Wednesday, Brookfield Asset Management agreed to buy a majority stake in Oaktree Capital, a move that will create a $475 billion alternative-investing behemoth. That’s more assets under management than any of the other blue-chip buyout firms reported at year-end. The transaction caps a flurry of deal-making across Flatt’s investing empire of four publicly traded companies focused on real estate, infrastructure, renewable energy and private equity. “I don’t think Brookfield has grown quickly,...

Staff of the nation’s largest pension is trying to sell a new investment model to its sometimes skeptical board By Chris Cumming The board of the nation’s largest pension still has plenty of questions about a proposed shake-up in its private-equity strategy, roughly two years after the pension’s staff began developing the plan. Ben Meng, chief investment officer of the California Public Employees’ Retirement System, on Tuesday detailed the proposed new strategy for private-equity investing, arguing that without it the underfunded pension system could have trouble hitting return targets and making its required payouts to retirees. Mr. Meng, who joined the $337 billion fund last month, argued that the new strategy was necessary to get more exposure to the best-performing private-equity managers. “We need private equity, we need more of it, and we need it now,” he said. Calpers’ private-equity reform has attracted some controversy si...

The SEC this year has kept up a steady stream of actions against private-equity firms By Chris Cumming Evidence is building that the Securities and Exchange Commission has moved on from the era of trying to reform private equity through enforcement actions. The SEC last week released its strategic plan for the next four years, which offers an important window into how the commission views the markets and its role as regulator and enforcer. The plan is heavy on efforts to protect retail investors and adapt to changing technology, including issues like improving cybersecurity and tracing initial coin offerings. But it dedicates almost no time to private markets, institutional investors, or fee and expense abuses, areas that were often highlighted as priorities under the previous SEC regime. Instead, the SEC is focused on ways to protect retail investors, a point Jay Clayton has repeatedly emphasized since taking over as the regulator’s chairman last year. Goals in the ne...

Political uncertainty has made investors pause By Joice Alves Fundraising for European buyouts has hit its worst quarter since 2010 as the divorce between the UK and European Union has fuelled a sharp decline in investors’ appetite for UK-dedicated funds. Fund managers have struggled to keep pace with the record volumes of cash raised for the asset class last year, writes FN ’s sister publication  Private Equity News.  Both capital-raising and the number of fund closings fell in the third quarter, according to LP Source, a data provider owned by FN and  PEN ’s publisher Dow Jones. Buyout fundraising dropped 68% to $7.9bn across 33 funds in the third quarter, down from $24.6bn raised by 46 funds during the same period last year. Fundraising also declined one-fifth during the first half of this year to $46.6bn, down from $67.8bn in the corresponding part of 2017. The figures represents the worst third quarter for European buyout fundraising sinc...

By Justin Villamil Mexico’s upstart stock exchange needs private equity to go public. The Bolsa Institucional de Valores, the bourse known as Biva that began operations in July, is trying to gain market share from the dominant Bolsa Mexicana de Valores by focusing on private equity managers ready to exit their investments and sell shares. The industry has grown 15 percent annually over the past decade, according to a report by El Financiero. “The story of private equity is very recent in Mexico,” Biva Chief Executive Officer Maria Ariza said in an interview at Bloomberg’s offices in Mexico City. “Companies are starting to mature, they’re starting to leave, and they’re starting to look for an opportunity to exit their investments. Ideally, one of the ways to do that is through the capital markets.” Companies controlled by private-equity firms tend to alre...

By Mark Kovac, David Burns and Jason McLinn Private equity funds have historically leaned heavily on a combination of cost cutting and multiple expansion to underwrite future value projections. But today’s macroeconomic and competitive conditions challenge either approach. In most markets, slowing economic growth or the outright threat of recession suggests that multiples are more likely to retreat from current record highs than to expand even further. At the same time, the most obvious cost-cutting opportunities are typically baked into inflated asset prices or have already been captured by a previous PE owner. What’s typically not baked into the price is the ability to deliver profitable organic growth—and to do it quickly. As discussed in Bain & Company’s Global Private Equity Report 2018, that involves focusing value-creation efforts on the top line and developing commercial excellence capabilities to help portfolio companies sharpen how they approach their chosen ...

  By Georgeta Gheorghe The strong momentum underway in Central Europe’s private equity markets is set to continue,  the latest Deloitte Central Europe Private Equity Confidence Survey shows. The high level of deal activity in Central Europe’s private equity markets is set to continue, with two-thirds of respondents expecting market activity to remain the same, the highest level in three years. Nearly a third (31 percent) expect activity to increase further from its currently high level, and just 2 percent expect activity to slow down – the lowest level in five years. It then comes as no surprise that two-thirds of respondents (69 percent) expect to focus mostly on deal-doing in the coming months, in line with the survey over the last two years. Expectations will be buoyed by liquid leverage markets, with three quarters of respondents (74 percent) expecting the availability of debt finance to remain the same over coming months. This is up from two thirds (67 percent) in the ...

The deal volume, however, rose 22% to 165 transactions during the period due to increased deal activity on the Internet and computer software segments. By DEEPTI CHAUDHARY Private equity investments in the first half of this year fell by almost 39% in value to $2.8 billion compared with the same period a year ago, according a Thomson Reuters data released on Tuesday. The deal volume, however, rose 22% to 165 transactions during the period on the back of heightened deal activity on the Internet and computer software segments, in continuation of the investment trend seen in 2017 as well. India has been a hub of private equity transactions. The first half of 2014 saw 169 deals worth nearly $2.53 billion. The January to June period of 2015 saw 231 deals worth about $6.9 billion, while the same period in 2016 saw 134 transactions to the tune of nearly $2.3 billion. Investors are optimistic that things will get better in the remaining months of the year, particul...