In one ear a recession looms, in the other, private equity is the hot, new asset class for alternative investors. Now, with this week’s speculative WSJ report that Vanguard is considering an entrance into the private equity space, InvestmentNews is questioning whether asset managers and financial advisors alike should consider diversifying portfolios to include private equity as an asset class for high-net clients. The returns are there, the capital is flowing, but this leads us to one simple question, how can private equity money be put to work amid constant fears of a recession?

Thankfully, that question is asked and answered in great detail in SPS’ fifth edition of the Science of Deal Sourcing published in AltAssets this month. The article discusses the state of the private equity marketplace, including the returns investors have earned over the last year, where deal flow stands, and the percent of deals that a private equity investor sees that actually close.

As the article examines, there are many services available to managing and augmenting a deal sourcing strategy. These solutions serve to head off the threat of new entrants into the market that are vying for the highly sought-after PE returns, or help to streamline and modernize your business development approach. The SPS Portal offers many automated tools and reports to point you to quality deal sources, as well as keep your pulse on the market and your competitors. Annual reports such as the SPS DOBR and PE Harvest Report, are available to help a firm evaluate its strategy, as well as harvest potential new deals from industry-peers. 

For investors feverishly deploying committed capital on investments – they can only hope will provide a worthy ROI – employing a data-driven approach to sourcing quality deals will ultimately lead to better fund performance. As talks of a recession rears its ugly head, what better way to recession-proof your fund, as well as manage the influx of deals seen per quarter, than employing a tried-true approach that couples actionable data with app-based technology.

The first quarter of 2019 saw a decline in deal volume compared to Q1 2018, yet the excitement around private equity as an asset class across the investment management universe continues to make waves, and record-breaking fund sizes continue to make headlines. Perhaps investors can put money allocated to private equity to work amid constant fears of a recession and boost deal volume in the second half of the year.

To learn more about the Science of Deal Sourcing 101, read the full article. If interested in how SPS data can support your deal sourcing strategy in this competitive environment, contact us.

Last week’s deals today

June 17 – 21, 2019
~86 deals traded

Deal of the week

Ares Management sold its position in Smart & Final Holdings to peer-equity investor, Apollo Global Management for $1.12 billion. Centerview Partners, Citigroup, and Jefferies & Co. acted as the sell-side financial advisors for this transaction. Smart & Final is a Commerce, CA based operator of retail grocery stores.

Most active subsectors
  • IT: Software & services
  • Financial: Services
  • Healthcare: Specialty clinics & centers
  • Services: Misc., asset light
  • Media: Marketing & sales services
Most active cities
  • Houston
  • Los Angeles
  • Phoenix
  • New York

Photo by Aditya Vyas on Unsplash

Comments are closed.