In Their Own Words With Limited Partners and Placement Agents

January 14, 2020 – Partner Matt Petronzio reflects on the private equity industry in 2019 and shares his predictions for 2020 with The Wall Street Journal.

“The most surprising aspect of 2019 is that there were few surprises. We do find it intriguing how quickly a reduction in rates quelled fears of an imminent recession. Purchase price multiples increased (again), but sponsors are contributing more than half the capital for investments in the form of equity. This will most certainly have an adverse impact on future returns (and holding periods) unless and until prices moderate.”

When asked about what the biggest challenge limited partners face in 2020, Mr. Petronzio said, “Securing meaningful co-investment allocations at reasonable valuations. There are an increasingly large number of institutional investors seeking co-investment with varying levels of capability and expertise. This dynamic is complicating sponsors’ ability to satisfy all of their constituents.”