What's Going On
“Mother, mother; there’s far too many of you crying; Brother, brother, brother; There’s far too many of you dying; You know we’ve got to find a way; To bring some lovin’ here today.” Marvin Gaye’s 1971 song lyrics are apt for our current environment, but nevertheless, private markets continue to thrive.
The latest market updates issued by Preqin found that investors continue to show a preference for larger and more established private equity managers in response to the pandemic. However, fundraising efforts by GPs remain strong, with a record number of funds in the market. Previously published H2 data also showed that a majority of investors said that the pandemic has not impacted their planned commitments for both 2020 (63%) and the longer-term (63%) as returns continue to meet or beat expectations and the 2020 vintage may be in line for good performance. This trend is consistent with the high volume of funds that TritonLake reviewed over the recent months as we screen the market and work with GPs to bring relevant and compelling opportunities to our network of sophisticated private market investors.
Not surprisingly, the Preqin research also finds that the approach to fundraising has been deeply affected by the operational challenges associated with the pandemic. In particular, the new working environment has driven firms to achieve greater efficiency in capital raises through the use of technology. This is expected to have a lasting effect on our industry. At TritonLake, we continue to invest heavily in technology to help GPs and LPs to connect in the virtual world with our online portal, tailored and personalized investor communication, and virtual meetings.
Preqin’s findings are consistent with what we hear from other industry leaders as well. We recently attended the GCM Grosvenor SEM Conference and the Duff & Phelps Alternative Investments Conference, and the overarching themes were the same – resilience, adaptability, and a focus on relationships and our networks. 2020 has certainly been tough on everyone, but the silver linings have been that we have figured out how to work remotely, leverage technology, and, in some cases, are even able to diligence new relationships remotely and much more efficiently than ever before.
So while Marvin Gaye’s lyrics may be relevant for our world today; our industry is strong, and resilient, and adaptable, and has shown that we can withstand the storm and emerge stronger than ever.