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Private equity leaders market expectations for 2020 revealed in Intertrust survey

5 December 2019

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  • Survey by Intertrust reveals that 69% of CFOs and COOs expect levels of dry powder to increase next year
  • 31% predict it will become slightly harder to raise capital in 2020

Over two thirds (69%) of chief financial officers (CFOs) and chief operating officers (COOs) at UK-based private equity and venture capital firms expect levels of dry powder– money raised but not yet invested – to increase in 2020.

Surveyed a recent BVCA reception event for CFOs and COOs, the results of the survey, conducted by Intertrust, a global leader in providing tech-enabled fund and corporate solutions, also found that 69% expect the private equity fundraising climate in 2020 to mirror 2019 levels.

However, over one third (31%) predict it will become slightly harder to raise capital and nobody agreed it will get ‘easier,’ suggesting that next year could see a marginal tightening of conditions.  Interestingly, this figure is still less than the 41% who said it would be hard to raise capital in 2018, when Intertrust carried out the same survey in 2017.

Although the volume of dry powder stands at over $1.5 trillion globally, driven by cash-rich but yield-starved institutional investors, 50% of CFOs and COOs expect valuations to stay the same.  This is almost 20% more than the number of those who believe the valuations will fall (31%) while 19% believe it will increase in 2020.

Patrick O’Brien, Global Head of Fund Services at Intertrust, said:
“It’s clear that senior private equity managers believe the market will continue to perform at a similar level in 2020, with fundraising outpacing deployment and capital returns. This is despite uncertainties in the UK market concerning Brexit and the outcome of the upcoming General Election.

“While this remains a challenging market environment, there is still a lot of capital to be put to work and we look forward to working with managers in the next year so they can continue to support business growth and of course generate value for their investors.”

 

*Poll of Chief Financial Officers and Chief Operating Officers at the BVCA’s annual COO and CFO industry event, sponsored by Intertrust, on 3 December 2019

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