As we head into the closing months of the year, most private equity market players are possessed of something that didn't exist in the spring – hope.
As you'll read in our September issue, it is hard to find anyone who believes that we are out of the credit implosion mess yet. But it is equally hard to find someone who believes that we're headed for another spell of chaos. Celebrate that.
Market uncertainty breeds paralysis, and the many secondaries market participants interviewed for this issue provide details as to why more such deals aren't getting done. But they all believe that at some point, deals will have to get done. (And why wouldn't they? Look at all that money they've raised.) Here's hoping that the consensus prediction of activity pick-up in the second half of 2009 proves true, because if secondaries are happening, it means the rest of the market is happening.
This issue contains a fascinating interview with the leadership of HarbourVest Partners, the funds of funds giant that has among the best perches in the world from which to view trends in private equity (see p. 32). Here's just one revelation from the article – limited partners are now so concerned about the quality of accounting and reporting, some have taken to touring HarbourVest's Boston headquarters to verify the firm has the back office resources it claims to have. Tell that to your next partner who poohpoohs fair value reporting.
You'll note some changes to Private Equity International magazine. Based on reader feedback, we have doubled down on the coverage that you most enjoy. In particular the news section of the magazine has more short, incisive features covering what the editors believe to be the most critical and interesting developments in the global private equity market.
We have also fine-tuned our Asset Class section, which is designed to be an insider's guide to the vast, variegated and changing world of limited partners (see p. 68). We felt right away that the demise of credit would not destroy private equity. Rather, if institutional investors fell out of love with the asset class, that would be its death knell. Christopher Witkowsky writes in his debut column this month, general partners do indeed have a lot more educating to do at the LP level in order to ensure continued support for the private equity allocation. But our frequent conversations with LPs and their advisers have led us to believe that private equity will continue to make gains in the institutional portfolio, and Asset Class will report how this is so.
Enjoy the issue,
By David SnowExecutive Editor