Against the backdrop of a new investment landscape, institutional investors will need to be more proactive in managing their private equity investment selections, according to private equity fund of funds investment manager Adveq.
"Investors need to make private equity investment decisions in the context of the overall investment landscape and take mid- to long-term macro-trends into account, as this will determine the success of their private equity investments," Adveq managing director Bruno Raschle said.
Raschle said the next decade will be characterised by more volatility in global markets. As a result, investment managers will need to actively manage private equity investments.
"Investors will need more bottom-up information about the underlying portfolio companies to enable them to really understand their risk exposure," Raschle said.
According to Adveq, the unsettled financial environment has meant private equity is the only real source if equity or debt available to finance businesses in the short term.
"As banks and other financial institutions find themselves unable to lend or invest and shy away from opportunities which are not guaranteed, businesses of all sizes will be driven to the private market to meet their debt and equity funding requirements," Raschle said.
Adveq has offices in Beijing, New York, Frankfurt and Zurich and manages approximately US$4 billion of assets.
