- The market has shown a risk-on sentiment so far in 2023, with some sectors recovering but still having a long way to go to fully recover from losses in 2021 and 2022.
- More than half of the overall portfolio is comprised of traditional buyout investments, with two-thirds in the Middle Market. This focus allows for lower purchase prices, less leverage, higher deal volume, and better long-term returns compared to larger market investments.
- Tighter credit conditions and market stress have resulted in a significant slowdown in global leverage buyout activity and a decrease in IPO activity, while M&A activity has returned to pre-pandemic levels creating opportunities for private equity investors.
- PE1 has achieved its stated diversification objective with exposure to over 500 underlying companies. We are currently assessing secondary and private credit opportunities. Secondary transactions provide diversification and immediate value and private credit is particularly attractive at the moment as rates and spreads have increased and covenants have materially tightened.
- PE1 will continue to deploy capital in resilient sectors, with experienced sponsors, while seeking structural alpha through favorable deal economics, and actively engaging in operational complexity and special situations.
- PE1 is now fully committed, and nearly 60% funded.
- The Portfolio is broadly diversified across 90 funds and over 500 companies.
- PE1 has delivered meaningful distributions to date – nearly A$75M in proceeds from investments.
Drilling down into the Portfolio
- 15 primary private equity funds
- 120 co-investments and directs
- 22 secondary transactions that are providing exposure to ~300 different companies
CPD points applicable for Australian Financial Planners
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