View all insights
image

Coronavirus & CEPRES‘ portfolio modelling and risk-management

The current standstill in global public life will have a strong impact on private markets in the near future.

Portfolio companies and therefore funds in the private equity, private debt, infrastructure, and real estate asset classes will be affected differently.

At CEPRES, we expect a very strong differentiation between different sectors with some even seeing positive effects.

According to CEPRES Market Data analysis, approximately 60-70% of the portfolio companies in the hands of private equity funds are active in traditional, manufacturing and consumer industries and are thus heavily dependent on functioning supply chains. Given the observed disruption to these global supply chains and structural changes in the short to medium term, affected companies will have to cope with efficiency losses, and consequently, lower operating margins. Due to lower purchasing power in all economies, we do not think potential medium-term revenue increases will compensate for these efficiency losses: the changes will, therefore, be at the expense of the companies’ enterprise value growth and investors’ performance.

The current standstill in global public life will have a strong impact on private markets in the near future.

Portfolio companies and therefore funds in the private equity, private debt, infrastructure, and real estate asset classes will be affected differently.

At CEPRES, we expect a very strong differentiation between different sectors with some even seeing positive effects.

According to CEPRES Market Data analysis, approximately 60-70% of the portfolio companies in the hands of private equity funds are active in traditional, manufacturing and consumer industries and are thus heavily dependent on functioning supply chains. Given the observed disruption to these global supply chains and structural changes in the short to medium term, affected companies will have to cope with efficiency losses, and consequently, lower operating margins. Due to lower purchasing power in all economies, we do not think potential medium-term revenue increases will compensate for these efficiency losses: the changes will, therefore, be at the expense of the companies’ enterprise value growth and investors’ performance.

Risk management
Portfolio monitoring
Portfolio management

Read next

image

The Convergence of Public and Private Markets: The Rise of Private Credit

Join thousands of institutional investors and asset managers already optimizing returns with private credit. Fill out the form to download your exclusive copy of “The Convergence of Public and Private Markets: The Rise of Private Credit.”

image

Navigating Market Volatility: Key Challenges Facing Asset Managers

For Asset Managers and Fund of Funds operating within private capital markets, the current market turmoil and renewed tensions present a complex set of challenges that require thoughtful, data-driven responses. To maintain investor confidence and deliver on performance expectations, Asset Managers must confront operational, analytical, and strategic issues head-on.

Discover actionable insights to navigate market turmoil and deliver superior performance. Download our whitepaper to gain strategic advantage in private capital markets.

image

Family Office LPs: Overcoming Challenges in Private Capital Investment

Family offices face unique challenges in investing in private capital, particularly when balancing financial returns with multi-generational legacy. Active involvement in managing investments can increase the risk of emotional decision-making and asset concentration.

For those investing in private capital markets, a portfolio management solution with proprietary private market data is key to tracking and managing investments effectively. Unlike public markets, private market assets require specialized insights for accurate performance and risk assessment.

Download our whitepaper to discover how advanced portfolio management and data-driven solutions can enhance your investment strategies.

Client Exclusives

Private credit: Spotlight on deals — the winners and losers & bounce back from the crisis

Read more
image

Navigating Private Debt: A Deep Dive into Historical Risk and Returns

Read more
image