Navigating Private Equity

Webinar Sections:

Introduction

Portfolio Update

Q&A

In the Fund’s latest webinar, Portfolio Manager and CIO of GCM Grosvenor, Fred Pollock, shares the latest updates and emerging opportunities in our global private equity trust, PE1.

CPD points applicable for Australian Financial Planners

Webinar Soundbites: 

Strong Corporate Performance Despite Macro Headwinds
Rising interest rates have led to higher financing costs and multiple contractions in private equity valuations, but PE1’s portfolio companies have maintained strong cashflows, offsetting valuation decreases.

Inflation and Interest Rates
While inflation remains above target, significant progress has been made, with US rates starting to decline. A rate reduction could boost private equity.

Private Equity Market Trends
Large-cap tech stocks have driven market performance, but smaller and mid-sized companies are now rallying. We expect this trend to benefit PE1 in the next 6-12 months as multiples normalize from their 2021 peak.

Deal Activity Recovery
Deal volume increased in 2024, bringing transaction activity to balanced levels. PE1 is now fully invested across 500 companies, offering broad diversification.

Portfolio Performance
The IRR of the dollars deployed into private equity is approximately 15%, aligning with targets. The portfolio has also locked in favorable private credit yields.

NAV Performance
After an initial surge, NAV plateaued in mid-2022. With full investment and positive tailwinds, we expect NAV growth to align with historical private equity returns.

Q&A
Fred discusses the NAV discount, private credit exposure, and a balanced outlook for 2024.