Indirect charges also may be incurred, such as brokerage commissions for incorporated securities. The largest five managers accounted for 29 percent of all fundraising, the highest share of the last decade, and tenants favored class A real estate as they fought to attract and retain employees. 10 Morgan Stanley Research, Investor Presentation India Banks, November 11, 2022. The proportion of total private capital fundraising that came from managers with an investment policy that includes ESG issues rose to 66 percent in 2022,5Preqin. Die auf dieser Website beschriebenen Dienstleistungen sind unter Umstnden nicht in allen Rechtsgebieten oder fr alle Kunden verfgbar. Indeed, LatAm grew by an outstanding 225%, to $19.5 billion in 2021 from almost $6 billion in 2020, with the top 12 deals accounting for a third of the total deal value in the region. While the long-term demand for capital is tremendous, with a projected global infrastructure spending gap of $15 trillion through 2030,2McKinsey. No representation or warranty is made as to future performance or such forward-looking statements. In 2022, mezzanine strategies were most in favor, posting record fundraising totals and more than tripling 2021s haul. Accordingly, save where an exemption is available under the relevant law, this material shall not be issued, circulated, distributed, directed at, or made available to, the public in Hong Kong. Dieses Dokument ist ein Marketingdokument. Private equity surged ahead with soaring deal and exit values. Investing in Asian private equity comes with a unique set of challenges and risks beyond what this paper has explored. On average, 56% of respondents believe deal activity will improve in the next 12 months. Eine monatliche Publikation mit den neuesten Einblicken des Global Multi-Asset Teams zum Wirtschafts- und Marktumfeld und zur optimalen Portfoliopositionierung. Source: S&P Global Market Intelligence. For more from Dry Powder on the report, you can listen to Three Essential Trends . Morgan Stanley Investment Managements 1GT Co-Leads $50 Million Funding for Everstream Analytics. Similarly, Australian software companies can be invested in at modest high single-digit/low double-digit EV/ EBITDAs and sold on to global strategics at premium double-digit EV/EBITDAs. SCARCITY VALUE DRIVES SIGNIFICANT EXIT PREMIUMS As the industry narrative turned from beta to alpha, there was less alpha to be had in 2022. PE buyout entry multiples declined slightly in 2022, falling to 12.9 times EBITDA from a record 13.2 times a year ago, while public market multiples compressed dramatically, declining to 12.0 from 14.6 times EBITDA. Mobile solutions such as real-time online loans to the unbanked, leveraging digital information, cross-border transfers at lower friction/cost, etc., are all helping to boost financial inclusion in Southeast Asia. Finally, amid the broader slowdown in technology-oriented PE deal making, investments in property technology companies fell to the lowest total in five years. Private markets deal volume plummeted, performance declined, and valuations felldramatically in certain sectors. Buyout deal value and exits set all-time records for the industry. And multifamily and industrialsectors benefiting from changes in living and shopping behaviorsoftened after rapidly rising rents and occupancy of the past two years boosted performance (Exhibit 6). Global PE performance turned negative for the first time since 2008, posting a 9 percent return through September1As measured by year-to-date IRR as of September 30, 2022, for global funds vintages between 2000 and 2019. and ending a five-year run as the highest-performing private asset class. In PE, inventory jumped from a historically low 0.9 times at the end of 2021, following a year of record deal flow that outpaced fundraising, to 1.4 times, the highest ratio since 2013. Automating these manual, inefficient processes are potential easy-wins to improve efficiency. Indeed, real estate performance has exceeded inflation in six of the last seven inflationary periods, in part due to cap rate compression even during a rising interest rate environment. Retrieved from: https://www.capitaliq.spglobal.com/web/client?auth=inherit#news/article?KeyProductLinkType=2&id=67618330, [13] PE-backed SPACs in 2021 soar past last year's tally. Under an IMA, with respect to management of assets of a client, the client prescribes basic management policies in advance and commissions MSIMJ to make all investment decisions based on an analysis of the value, etc. Registered No. France: MSIM FMIL (Paris Branch), 61 rue de Monceau 75008 Paris, France. Registered Office: 25 Cabot Square, Canary Wharf, London E14 4QA. In our podcast series, Bain's Hugh MacArthur interviews leading experts on the trends and opportunities that will redefine the private equity industry. Retrieved from: https://www.spglobal.com/esg/insights/key-esg-trends-in-2022. NR outperformed all others, returning 15.6 percent in a second consecutive year of strong performance driven by rising commodity prices. MSIM will look to address these risks/opportunities in future briefs. This material has been issued by any one or more of the following entities: EMEA: This material is for Professional Clients/Accredited Investors only. Yet, like most private market segments, real estate experienced a downturn in 2022 compared with the record year it followed. LPs concentrated commitments among large funds as many investors chose to re-up with known, tested names while forgoing commitments to smaller, newer managers. On some diversity metrics, private markets firms compare favorably with corporate America, although ethnic diversity is not yet broad based. Counterintuitively, manager selection mattered less in 2022 than in years past: the interquartile spread of returns of PE funds narrowed in 2022 to 21.6 percent from the prior ten-year average of 33.8 percent. AUM grew as well, reaching a new high of $1.3 trillion, 14.2 percent higher than in 2021. Infrastructure and natural resources (NR) overcame broader market headwinds in 2022 to set a new fundraising record of $158 billion (Exhibit 9). Expanding capitalization (cap) rates across sectors, which represent the multiple investors are willing to pay for net operating income (NOI), drove performance lower. All forecasts are speculative, subject to change at any time and may not come to pass due to economic and market conditions. [11] S&P Capital IQ Pro Platform (as of 25/01/2022). Catch new episodes by subscribing toDry PowderonApple Podcasts,Google Podcasts,Spotifyor wherever you may listen. For those that can identify and partner with such private equity managers, there exists a promising opportunity for outperformance in the region. [2] Private equity managers expect another boom year in 2022. current macroeconomic and geopolitical events are creating short-term pressure on high-growth sectors such as telecommunications and renewables. Like deal-making, fundraising also saw an upward growth trajectory in 2021 as money flew abundantly into private markets. According to Preqin data,[3]aggregate capitalraised by growth funds hit a new record of $136 billion, up by 60% on the previous year and exceeding the 5-year average of $114 billion. In particular, megafunds gained prominence: 11 funds of more than $10 billion each were raised, totaling $170 billion collectively (Exhibit 4). This is prepared for sophisticated investors who are capable of understanding the risks associated with the investments described herein and may not be appropriate for the recipient. In total we received 357 responses from PE and VC investors globally. Alternative investment funds are often unregulated, are not subject to the same regulatory requirements as mutual funds, and are not required to provide periodic pricing or valuation information to investors. These conclusions are speculative in nature, may not come to pass, and are not intended to predict the future of any specific Morgan Stanley investment. It's our market overview from Bain & Company's 2022 Global Private Equity Report. Last year may go down as a pivotal year in the history of alternative assets. Disallowed Products Our Products Preqin Pro Alternative assets data platform Insights+ North America largely led this increase, accounting for 76% of the total deal value. 13 Russell Reynolds, Transitioning to the Next Generation: Leadership succession within family businesses in Southeast Asia, November 2021. OPAQUE ENTRY VALUATIONS Registered in England. Out of those PE firms that have been fundraising in the last 12 months, a quarter indicated that convincing Limited Partners (LPs) about the investment strategy and source of competitive advantage is the biggest challenge faced during the process. This material is only intended for and will only be distributed to persons resident in jurisdictions where such distribution or availability would not be contrary to local laws or regulations. In Indonesia, for example, stakeholders including entrepreneurs, venture capital (VC) funds and politicians, are working in concert to pre-empt potential fintech-related regulatory issues observed in the U.S. and China, such as crackdowns in the peer-to-peer lending space. Its 2022, and were coming off an extremely busy year in private equity. After more than a decade of rapid fundraising growth, strong macroeconomic headwinds slowedbut did not stopprivate debts growth. Report is also available in Chinese, Japanese and Korean upon download. Source: AVCJ Research, as of 31 December 2022. 3 Preqin, data as of July 2022. For illustrative purposes only.[8]. Please consider the investment objectives and nature of risks before investing. (As of 20/01/2022). Across the entire investment life cycle, from fundraising and asset selection to value creation and exit planning, ESG is on the minds of investors (Exhibit 11). Critical in this endeavor is the identification of private equity managers which possess the appropriate skills and requisite experience to manage the regions unique challenges. Global Private Equity Report A Private Equity Lens on the Energy Transition The global shift away from carbon-based fuels is gaining momentum. [11]Another active year is anticipated[12]as sponsors continue to take advantage of favorable exit conditions and new dynamics such as the rise of Special Purpose Acquisition Companies (SPACs). This year we also included a question on investors advances on their digitization and automation journey. Australia: This material is disseminated in Australia by Morgan Stanley Investment Management (Australia) Pty Limited ACN: 122040037, AFSL No. Most of the current fund commitment decisions were made last year, which was impacted by the denominator effect as public markets . In terms of advanced digitization, 14% declare their organizations have advanced to the point of leveraging data science for automated deal sourcing and due diligence, while only 7% of respondents said that digital technologies have been fully implemented into their playbook. (As of 31/01/2022). MSIM announced today that it has held the final close of Ashbridge Transformational Secondaries Fund II (Ashbridge II) at $2.5 billion of total capital commitments. Gbenga Oladeji oversees Global Private Markets for Johnson & Johnson Benefits Investment team. When it comes to the fundraising outlook, half of the respondents expect fundraising conditions to remain the same and another 36% believe it will improve; among Middle East and Africa investors the percentage is as high as 52%, which indicates a very positive outlook for 2022. In Europe, an 11-year run of fundraising growth ended, largely due to geopolitical instability and broader macroeconomic challenges, including volatility in foreign currency exchange rates. While Asian private equity can be a difficult segment to diligence and access, MSIM believes that its 20+ year history investing in private equity funds and opportunistic investments in Asia, combined with the broader resources of Morgan Stanley, can help bridge this knowledge gap. LatAm investors especially seem to have accelerated the adoption of ESG principles: the number seeking investments in companies with a good ESG track record has nearly doubled from last year, to 43% from 25%, while the number of firms that are not considering ESG factors has decreased considerably, to only 7% from 19% in 2021. Private debt was not immune to the macroeconomic conditions last year, however. As of the second quarter of 2022, dry powder exceeded $3 trillion, reflecting an 8.4 percent year-over-year increase and marking the eighth consecutive year of growth. 48% of respondents were senior level professionals. For the fifth consecutive year, S&P Global Market Intelligence conducted an annual survey among PE and VC practitioners to measure industry outlooks for the upcoming 12 months. S&P Global Market intelligence. Weitere Einzelheiten knnen aus unseren Nutzungsbedingungen entnommen werden. PE/VC firms considering investment in the Consumer sector plan to focus on the Consumer Retail (24%) and Consumer Producers sub-sectors (18%), while taking rather a cautious approach to Consumer Leisure (8%). The 18-month total of $1.7 trillion is by far the strongest year and a half in the industry's history (see Figure 3). Financial services (2.5 times) and information technology (2.2 times) recorded the largest multiple declines among PE subsectors, while rising commodity prices drove multiple expansion in raw materials and resources (+2.6 times).
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