About the report

With Covid-19 turning the global economy into recession and causing turmoil in public financial markets, investors are reviewing their investment strategies and deciding when the best time is to invest. The white paper presents a case for private equity in the given circumstances.

Key highlights

• Private equity’s best returns tend to follow recessionary periods Historic data show that private equity outperforms public markets throughout the business cycle, and IRR picks up following recessions, as most recently observed following the dotcom bubble and the global financial crisis.

• ‍More flexible deployment of capital Flexible access to capital in a downturn can be essential to prevent bankruptcies. While defaults of individual businesses do go up during recessions, studies show that the risk of ‘catastrophic loss’ is less than half for buyout companies compared to public companies.

• ‍Positive impact of active management One of the key – and sometimes underestimated – drivers of value by buyout funds is their active approach to governance. Global top tier fund managers have several ways to actively support the management of their portfolio businesses.

‍‍‍‍‍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. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility.