2 minute read
UBS Real Estate & Private
MARKUS BENZLER
GLOBAL HEAD MULTI-MANAGER PRIVATE EQUITY, UBS REAL ESTATE & PRIVATE MARKETS
This year was great for the private equity market.
Since Covid-19 dipped the market in Q1 2020 it has been a strong run, and actually even on a longer perspective, since the global financial crisis, private markets have enjoyed consistent and strong returns, with a few exceptions here and there.
In general it seems to be like a super-cycle, although we anticipate this will slow down at some point for a number of reasons.
I think in 2022 there will continue to be spill-over effects from public markets. I don’t know if it’s everybody’s view, but the common perception for public markets is that there’s more volatility [to come] and also opportunities, but more of a sideways movement than up or down.
[The shock for private equity investors in 2022] could be just related to the real economy, or it could be political or based on other movements affecting stock exchanges globally. I think it’s very likely that something like this will happen in 2022 and this will impact private market valuations. It will be with a lower correlation than one but it will affect private markets. We wouldn’t go so far as to say ‘prepare for it’ but we are very mindful that this can happen and quite frankly I am not sure, especially on the limited partnership side, how prepared people are for that.
On the GP front, if they are managing buyout funds and they’re more linked to the industrial sector or invested in retail companies, they’ve typically already worked hard in the last one and a half years due to the real economic impacts of Covid-19. Obviously some GPs are less prepared than others but I think on the GP side, they’re quite well equipped in terms of what to do if the environment changes, especially among those that have been around for longer than others and have the skill set to weather the storm, whatever might come.
We have a much more cautious stance towards our own investors, but also to our management. Let’s be prepared not to always go in one direction. In the best case scenario, such a change will come from a political angle or from stock markets, with less of a root in the real economy, but it could also arise from recent developments with Covid-19 which is continuing to impact markets, even with a vaccine.
CHAPTER TWO
FUNDRAISING
