Private equity feeling pinch
Newly-released State Street research has confirmed the anecdotal evidence — private equity is doing it tough amid the current market volatility and tight liquidity.
The State Street Private Edge Index, which includes more than 1,400 private equity partnerships with a total fund size of $1.3 trillion, reveals that the ability for private equity outfits to finance deal flow and achieve exits has been severely constrained.
Commenting on the Index, State Street vice president Gerard J. Labonte said the past two quarters had marked the first series of consecutive negative quarterly returns for the index since the downturn from October 2000 to March 2003.
However, he noted that there had been pockets of relative strength with respect to private equity and that this was because over the past 12 months, there had been the launch of numerous distressed debt funds that had shown an ability to be opportunistic and therefore achieve positive results.
Recommended for you
Sydney-based alternative fund manager East Coast Capital Management has formed its first advisory council as it enters its next phase of growth.
With 40 per cent of advice practices looking to increase their ETF usage, the next frontier being embraced is smart beta ETFs with flows doubling in July, providers have said.
Australian ETFs saw flows of $5.8 billion in July, more than double the previous month, and adviser adoption is tipped to help total flows reach $50 billion by the end of the year.
Pinnacle’s London affiliate, Life Cycle Investment Partners, has secured over $15 billion in FUM in its first year and achieved profitability, the firm’s fastest affiliate to do so.
