The private equity (PE) industry ushered in 2020 in a generally somber mood after wrapping up a year in which it had to navigate a landscape marked by economic volatility, political upsets, and a rise in protectionist sentiments. Nevertheless, the annual survey conducted by S&P Global Market Intelligence among PE professionals late in 2019 still showed a prevalence of optimism for the year ahead: 44% of respondents said they expected investment activity to improve versus 20% anticipating a deterioration. Two months within 2020, the world was changing in unprecedented ways as it confronted the gravest public health crisis in living memory. “The global pandemic has disrupted severely social and economic systems, presenting national and corporate leaders with challenges of epic proportions. In the world of business, PE players have been under even greater strain given the diversity of their investments in terms of industry sectors and geography. Although efforts are now concentrated on ensuring the survival of portfolio companies and positioning them to capitalize on the recovery, there is also a recognition that this “black swan” event could open up some great investment opportunities,” comments — Philip van Wijngaarden of PE and venture capital company Ramphastos Investments.
According to a brief published by Bain & Co, “The number of global buyout transactions fell 60% from January to April  and is now trending at around a third of the five-year monthly average.” The reason for this is that general partners (GPs) have prioritized portfolio stabilization, and owners have shelved sales plans due to the volatility. Exit activity also declined sharply during this period, dropping by 72% as PE funds opted to sit on their assets rather than compromise on price. On the fund-raising front, the data reveal a pleasing picture, with a total of $287 billion attracted. However, most of that money flowed into PE funds before the pandemic hit hard, with new commitments likely to decline in the months ahead. On a positive note, even before the health crisis, PE companies were taking steps to make capital deployments more effective, as stated in the S&P Global report. These include implementing inorganic growth strategies, accelerating investments in defensive sectors such as healthcare and information technology, and embracing environmental, social, and governance (ESG) policies as a means of adding value. According to Ramphastos Investments, these earlier steps along with new practices adopted during the pandemic should allow the PE industry to rebound faster. As noted in a report by PitchBook, “times of crisis tend to be the best times to invest in private (or public) equities, and LPs should take advantage of this pricing environment if possible.”
Established in 1994 by passionate entrepreneur Marcel Boekhoorn, Ramphastos Investments is a Dutch-based venture capital and private equity firm dedicated to driving top-line growth at enterprises in all stages of their evolution. Favoring a hands-on approach to business building and a non-conformist mindset, the company typically seeks to acquire majority stakes and proceeds to collaborate with company leaders to pave the way for enduring success. After buying into a business, Ramphastos Investments works tirelessly to implement a robust value-creation strategy while also providing all the advice, tools, and assistance required to execute on it. Its primary focus as an investor is on driving revenue growth through buy-and-build strategies, marketplace innovation, internationalization, management empowerment, and strategic partnerships.
Ramphastos Investments: https://www.ramphastosinvestments.com
Philip van Wijngaarden - Crunchbase: https://www.crunchbase.com/person/philip-van-wijngaarden
Marcel Boekhoorn - Founder-owner @ Ramphastos Investments – Crunchbase: https://www.crunchbase.com/person/marcel-boekhoorn
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