Fears of a pending recession have gripped investors this year. A combination of rising interest rates, inflation and stumbling economic activity have fed concerns that a downturn could be imminent, with the steep fall in public equity markets a stark demonstration of sentiment. And while private equity as an asset class has shown some resilience to economic shocks in the past, worries persist about the correction in multiples and potential valuation haircuts. But what are the opportunities in this environment?

Earlier this week, our CEO Steffen Pauls hosted a webinar to discuss the various ways that PE can overcome and in some cases take advantage of a broad-based economic downturn. He also looked back on his private equity career through the lens of previous recessions, and took time to answer questions from our audience.

Key points covered included:

• Given their role as active owners, private equity managers can work with portfolio companies at a frequent cadence to aid them through tough economic times, both through good governance and capital provision.
• The PE industry ‘reinvented itself’ during and after the great financial crisis, broadening their capital basis and putting an emphasis on value creation for portfolio companies.
• The restructuring of several industries globally given the sharp change in macroeconomic conditions could provide a compelling opportunity for managers with a clear understanding of how value chains will operate going forward, particularly at lower buying multiples.

For more from Steffen, please check out our video below:

Important notice

This content is for informational purposes only. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Your capital is at risk.