According to everything I've read, private equity has been played out.
It used to be quite profitable, but now there are more players / money on the market than there are attractive companies for sale.
And the PE firms are fighting over these companies, driving up purchase prices.
Instead of private equity, you can also buy a small-cap ETF, which behave in a similar way. 😘
It used to be quite profitable, but now there are more players / money on the market than there are attractive companies for sale.
And the PE firms are fighting over these companies, driving up purchase prices.
Instead of private equity, you can also buy a small-cap ETF, which behave in a similar way. 😘
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@PowerWordChill I will take another look at it thank you very much 🫶
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5Mes
@PowerWordChill I have a similar view! PE as an asset class has become less attractive since the slightly higher interest rates. The typical buyout business (LBOs) of PE companies has flattened out considerably due to the higher interest rates (an LBO with a debt level of over 70% no longer makes sense). The pearls in the portfolio are polished up at an operational level and not sold. The less well-performing assets in PE portfolios are sold at multiples that are sometimes too low.
However, in my opinion PE companies are still interesting candidates on my watchlist:
1. specialized PE companies such as $MUX, which do a lot of restructuring, have a high deal flow, especially in Europe, in the next few years and are also sitting on a lot of dry powder. A good mix 😄
2. companies such as $KKR or $BX are currently diversifying heavily into other asset classes. In my opinion, a particularly interesting area here is private credit (which is nothing more than shadow banking - but lucrative) or infrastructure.
3. if interest rates are now successively lowered, this will have a positive effect on the PE sector, but especially on LBO activity. However, you need a crystal ball for this 😄
Cheers!
However, in my opinion PE companies are still interesting candidates on my watchlist:
1. specialized PE companies such as $MUX, which do a lot of restructuring, have a high deal flow, especially in Europe, in the next few years and are also sitting on a lot of dry powder. A good mix 😄
2. companies such as $KKR or $BX are currently diversifying heavily into other asset classes. In my opinion, a particularly interesting area here is private credit (which is nothing more than shadow banking - but lucrative) or infrastructure.
3. if interest rates are now successively lowered, this will have a positive effect on the PE sector, but especially on LBO activity. However, you need a crystal ball for this 😄
Cheers!
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