Post-COVID-19 private equity

The COVID-19 pandemic has tested the private equity industry in ways not seen before, handcuffing its ability to pounce as investors everywhere remained cautious or complacent. But as the situation begins to stabilize, we expect private equity firms will enthusiastically re-engage and help lead the recovery, applying their historic expertise and value-creating capabilities to stand companies back up and position them for long-term success.

Our new report, Post-COVID-19 private equity: Thriving in a bifurcated world of opportunity, looks at how private equity firms are shifting their focus to preserve the value of the companies in their portfolios, and how they are working to strengthen relations with their limited partners and lenders to prepare for the avalanche of investing opportunities expected as the pandemic eases.

Some of the trends, behaviours, and strategies addressed include:

Deeper dive into data: Private equity funds are taking a more active role in overseeing portfolio activity,  increasing their emphasis on timely, accurate, and predictive financial and operational reporting to help direct triage activities by using  various data capabilities.

Changes to investing criteria: How private equity funds are evolving, including changes in deal activity and the criteria used to evaluate targets.

Expanding sources of liquidity: How private equity firms can move past traditional fundraising efforts.

Active management: Active portfolio management will continue on its pre-COVID-19 growth trajectory, but private equity funds need to look for new ways to create and preserve value; they’ll also have  to take a hard look at which strategies worked – and which didn’t – when the pandemic upended business as usual.