Private equity opportunities may arise
Watson Wyatt is claiming vindication of its September 2007 prediction that private equity managers were facing tougher times and is suggesting that while headlines might be indicating darker times ahead, now might be an interesting time for investors to selectively invest in private equity.
The Watson Wyatt analysis, released this week, claims that it is during periods of adversity that private equity managers have made significant money for investors in the past.
“Furthermore, if the pricing environment softens, as many managers expect will be the case, private equity managers will be well positioned to buy good quality businesses at more attractive valuations than have been available over the past couple of years.
The Watson Wyatt analysis said the key for a private equity investor was selecting managers with a proven discipline to wait patiently without deploying capital if the pricing environment was unappealing.
However, the analysis concludes that private equity investors are witnessing the end of an era and that returns on average are likely to fall to more normal levels.
AUTHOR
Mike Taylor
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