Private Equity & the Capital Market

March 31, 2009

Last week I went to a Global Private Equity Conference in Glendale Arizona hosted by Thunderbird School of Global Management. The mood was somber yet hopeful. The general consensus is that more government involvement is not necessarily a good thing. Investors are bracing for a lot of new regulations. From December ‘08, many hedge funds and high net worth investors simply got out of the game and are sitting on the sidelines until the market settles down a bit. There is over $11T sitting on the sideslines right now just waiting.

Investors are no longer looking for the big payoff and 30% ROI. This year, people are more concerned with capital preservation. Everyone is being cautious. The new rule of thumb is to be conservative and have steady returns of maybe 5-15%. The question is where to invest.

It seems the best place to invest these days is in infrastructure and clean technology both in the U.S. and emerging markets. President Obama has already set aside billions of dollars to fund green technology. If you have green tech projects or if you are looking to invest in green tech projects, please contact us.

Nobody seems to know how we’re going to come out of this financial crisis. It is new territory for everyone, and nobody has the solution. Most people seem to agree that the recession (or depression) will continue for the rest of this year. At least everyone has become fully aware of the problem, and things are being done to fix the system.

So this year, the strategy seems to be to sit tight, be conservative, and prepare for when the market turns around. The market will rebound. It always does. But where it lands this time, nobody knows…

Written by billshuttic · Filed Under Bill's Articles