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By Charlotte DEWYNTER, Head of Infrastructure at Union Bancaire Privée (UBP)
Soaring rates have reshuffled the distribution of risk premia across public markets, and private markets are not immune to this change. The coming years are extremely unlikely to have any similarity with the past decade, when left tails were artificially suppressed by the “Fed put” and were awash with liquidity.
Markets are now evolving into an environment that is likely to reward a hands-on approach rather than a passive one. In private equity, specifically in venture capital, managers will have to pay close attention to maintaining a strong cash discipline in their portfolios’ companies, whilst buyout investors will face speed bumps on the way out.
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