Private Equity Investment Gets Its Moment in The Spotlight
After a record 2021 and claims of outperformance through sharemarket sell-offs, alternatives such as private equity appear to be having a moment.
Indeed, reports suggest that individual investors in the US are now piling into private markets to escape volatile stocks amid suggestions that the traditional 60/40 portfolio needs to be up-ended to devote a bigger chunk to alternatives.
But warning bells are starting to sound: just this week, the chief investment officer of Europe’s biggest asset manager, Vincent Mortier of wealth giant Amundi, likened segments of the private equity market to a Ponzi scheme.
Meanwhile, Franklin Templeton has written down its stake in venture capital’s tech darling Canva by a total 58.5 per cent since the start of the year, signalling the tech rout is being felt far away from public markets.
Private equity, loosely defined as ownership or part-interest in a company that is not publicly listed or traded, sees investors – typically funds or high-net-worth individuals – lock away their money, often for years at a time, with the hope of generating substantial returns at a later date.
To read the full The Australian article by Cliona O’Dowd, click on the link below.
