The year 2020 was undoubtedly tumultuous, with the COVID-19 pandemic sending shockwaves through the global economy. However, private equity investments showed resilience amidst the volatility. As warehoused investments refer to assets held temporarily on the balance sheet of a bank before being securitized, we can examine relevant price charts to ascertain the private equity trend in 2020.
Warehousing enabled private equity firms to bide time before deals
Many private equity firms utilized warehousing facilities from investment banks to essentially ‘park’ assets while they awaited improved market conditions to finalize acquisitions or other deals. This strategic approach allowed them to pounce when valuations became attractive without losing momentum.
Dry powder reserves trended upwards showing investor confidence
Despite the uncertainty, private equity dry powder – the amount of capital ready to deploy – increased in 2020 rather than declined. This dry powder figure topping $1.5 trillion demonstrated robust investor appetite in private markets amidst public turbulence.
Resilience with some sector-based disparities
Predictably, some sectors like travel and retail struggled while healthcare and software remained attractive. But broader private equity price charts illustrate stability rather than collapse during an unprecedented global crisis.
In reviewing warehoused investments and related private equity price charts in the context of 2020, we see an asset class holding up well against the odds.