Private equity and venture capital (PE/VC) in the developed markets outperformed those in emerging markets in the first half of 2023, and while the developed and emerging markets PE/VC indexes have historically outperformed their public market counterparts, the most recent year stands out as an exception.
We expect US venture capital down rounds will increase, even as artificial intelligence continues to serve as a major catalyst within the market. We believe flows to European turnaround and value strategies will increase and flows to China private investments will remain muted. We expect secondary transaction volume will increase to a record level.
No. In recent years, many private investment fund managers have painted themselves with a growth equity brush. Limited partners need to be increasingly diligent to determine if they are accessing the truly differentiated and attractive investment profile offered by actual growth equity.
Yes, US-China geopolitical realities are already having an impact on trade and investment flows within Asia. China will remain an important destination for investor capital, but the shift in capital flows, alongside positive domestic structural developments in other parts of Asia, create investment opportunities beyond China that deserve a closer look.
The shifting geopolitical realities between the United States and China have already impacted trade and investment flows. In this two-part series of VantagePoint, we review this reality and consider investment implications alongside those of other key factors—such as domestic structural developments, macroeconomic conditions, and valuations. In Part I, we focused on opportunities in China specifically. In this companion piece, we discuss investment opportunities beyond China.
The shifting geopolitical realities between the United States and China have already impacted trade and investment flows. In this two-part series of VantagePoint, we review this reality and consider investment implications alongside those of other key factors—such as domestic structural developments, macroeconomic conditions, and valuations. In Part I, we focus on opportunities in China specifically, and in Part II, we discuss other Asian investment opportunities beyond China.
Investor interest in co-investing has grown in recent years, given the benefits for both general partners and limited partners. We answer six frequently asked questions about this strategic allocation.
The U.S. Securities and Exchange Commission adopted the most extensive reforms for the private investment industry since the Dodd-Frank Act of 2010. The reforms include many noteworthy aspects that we, and the industry, are still reviewing closely.
Risk assets enjoyed mostly positive returns in fiscal year 2023. Equities rebounded as fears over the severity of a possible recession moderated. Emerging markets equities lagged developed markets as the pace of reopening in China disappointed. Bond performance improved as credit assets posted positive returns but developed markets sovereign bonds struggled. Real assets suffered due to higher interest rates and slowing demand.
In 2022, the Cambridge Associates LLC Developed Markets ex US Private Equity and Venture Capital Index returned -11.1% in USD terms, marking a sharp reversal from two strong years in 2020 and 2021. Performing slightly better than its developed markets counterpart, the Cambridge Associates LLC Emerging Markets Private Equity and Venture Capital Index returned -8.1% for the year in USD terms, but it also suffered a substantial reversal from strong performance in recent years.