Why private equity can endure the next economic downturn

In this episode of the NextWave Private Equity Podcast, Andrew Wollaston, Global Private Equity Transactions Leader, and Peter Witte, Global Private Equity Lead Analyst, join Winna Brown to discuss how PE firms are planning for a potential market correction and the opportunities it might afford.  

Private equity (PE) is an increasingly important contributor to the global economy. The PE industry has doubled in size since the 2008 recession, with US$3.4t in assets currently under management (AUM), a figure that is expected to increase to $5t over the next 3-5 years. With over $700B in “dry powder” available in PE funds across the world, an economic downturn will likely present compelling opportunities to deploy capital reserves when prices are more attractive to investors.

While PE-backed companies performed generally well during the GFC, over the last decade, the PE model has evolved in a number of ways that make it even better prepared for future downturns. Funds have improved operating capabilities to help companies make smart decisions in the face of increased volatility. And their wholesale expansion into adjacent asset classes – credit in particular – gives funds new means of providing support in ways they largely couldn’t just a decade ago.

Perhaps most importantly, as consensus grows regarding the lateness of the current macro cycle, PE firms are already planning for a potential market correction and the opportunities it might afford.

Learning outcomes

In a number of important ways, PE firms are better prepared for a downturn than they were a decade ago:

  • The industry has more capital at its disposal.
  • PE has diversified in ways that increase its resilience.
  • PE firms have expanded their operating capabilities.
  • LPs are more sophisticated and have access to better portfolio management tools.
  • Perhaps most significantly, PE firms are prepared to deploy more aggressively than during the 2008 recession

For your convenience, full text transcript of this podcast is also available. Read the transcript

Presenters

Andrew Wollaston
EY Global Reshaping Results, Turnaround and Restructuring Strategy and Transactions Private Equity Leader
Winna Brown
EY Americas Financial Accounting Advisory Services and Private Equity Leader

Podcast

Episode 04

Duration 26m 16s

In this series

series overview
(Event List - Manual)

Why private equity can endure the next economic downturn

In this episode of the NextWave Private Equity podcast, our speakers review the industry’s evolution since the 2008 recession and its position for growth.
Podcast

Episode 04

Duration
26m 16s

Presenters

Andrew Wollaston

EY Global Reshaping Results, Turnaround and Restructuring Strategy and Transactions Private Equity Leader

Winna Brown

EY Americas Financial Accounting Advisory Services and Private Equity Leader

How private equity-backed companies can prepare for IPO

In this episode, our speakers discuss how PE-backed companies can meet shareholder expectations after the IPO.
Podcast

Episode 03

Duration
17m 46s

Presenters

Jackie Kelley

EY Americas IPO and Financial Accounting Advisory Services Capital Markets Leader

Winna Brown

EY Americas Financial Accounting Advisory Services and Private Equity Leader