Post-pandemic economy, Russian-Ukrainian war, tensions with Chine, and recession are only some of the events that make the world roll these days. Yet, we have some basis for claiming that private equity is going to survive and stay strong in its current position.
Yet, 2022 was truly the year of mind-blowing results in private equity, with the numbers crushing even the ones of 2021. Some factors like vague political situations and weak political markets made it slow down. But remember, in such times, anyone can find both: challenges and opportunities. So, let’s dive deeper into the future of private equity together and discover major trends and strategies.
Growing Demand from Retail Investors
Private equity retail investors rock in 2023. Fundstrat suggests that the stress and spontaneous decisions of retail investors, who sold their stocks last year, became a trigger driving force for an increase in the stock market this year. Moreover, investors now have a record $1.8 trillion in cash, which is plenty of firepower to propel equities higher at a time when recession fears are beginning to plummet substantially. The FTSE Russell warns that there will be two major threats to retaining private equity in 2023, according to the survey conducted with investors:
- The impact of the recession was mentioned by 62% of investors
- Increased stock market volatility mentioned by 49% of investors
But here is one piece of advice from me – don’t be scared to invest in private equity retail in 2023. While the market falls down, it also gets an extremely optimal place to get extra cash, being provided with an experienced adviser.
How to Invest in Private Equity as a Retail Investor
Investing in private equity might be intimidating for ordinary investors, but don’t worry! There are several ways to get in on the action.
- Method 1. Invest in private enterprises through private equity funds, which pool money from multiple investors, including regular ones.
- Method 2. Buy and sell private company shares on the secondary market.
If you’re feeling daring, you might consider investing in private enterprises using crowdfunding sites. However, keep in mind that private equity investments are riskier and need thorough study and due diligence. Before you dive in, talk with a financial counselor or investing specialist to identify the best investment plan for your financial goals and ways of how to invest in private equity as a retail investor.
Private Equity Trends
Based on comprehensive research, the PwC portal distinguished several private equity trends for the year 2023. And here are 5 main trends they came up with:
- The private equity business is witnessing historic fundraising levels, with a total of $727 billion raised globally in 2021. This is owing to a high level of investor interest in private equity as an asset class.
- As private equity gets more prominent, competition grows, resulting in higher values and increased rivalry for projects. As a result, some private equity companies have turned to alternate investment techniques such as venture capital or distressed investing.
- ESG factors are becoming increasingly relevant in the private equity market. Investors want private equity companies to include environmental, social, and governance (ESG) considerations in their investment decision-making processes and to report on their ESG performance.
- Private equity companies are adopting digital transformation to increase operational efficiency, improve client experience, and drive growth. Artificial intelligence, machine learning, and data analytics are examples of such technology.
- Private equity firms are putting more attention on exit plans, with a focus on enhancing portfolio business performance, preparing companies for sale, and examining alternative exit possibilities such as special purpose acquisition companies (SPACs).
The Opportunities for Private Equity
Let’s talk about private equity trends. For investors, the private equity market provides significant returns and diversification options, as well as access to new enterprises. Retail private equity firms are boosting operational efficiency, improving client experience, and driving growth by implementing new technologies such as AI and machine learning.
However, competition is rising, and investors must exercise caution and consult with specialists in order to make sound investment selections. To sum up, private equity is a highly sought-after asset class with significant growth and innovation potential, which won’t give up its position in the future.
The Private Equity White Sails Platform Accelerates the Transformation
Ready to jump into the world of private equity and investments? The White Sails are here for you. Our professional advisers know how to improve your investment portfolio while getting solid profits from investments. All you need to do is to drop us a line now to meet our experienced specialists and obtain a broad forecast on private equity development in the following years.
