Secondaries and trends in Venture Capital according to Staffan Mörndal from Verdane
We asked Staffan Mörndal from Verdane about secondary direct transactions and the current investment environment. Here are his insights.
The COVID-19 factor is a massive disruption for the Private Equity ecosystem and all the investors need to understand what is likely to happen in the market now.
This probably explains the high number of professionals that from all over the world registered for our first webinar - COVID-19 & the PE Market: Insights from LPs/GPs (powered by Silverfern) which took place on the 29th of April 2020.
Alongside the fruitful panel discussion, our attendees could vote in a quick poll related to the forecasts of COVID-19 impact on the industry. It has revealed some interesting figures:
1) 57% of industry professionals think we need 1 year or more to stabilize the Private Equity market, while for the 39% it will take around 6 months from now.
2) 94% of companies will increase their online business strategy.
3) 53% of industry professionals see a decrease in the dealmaking and lending activities by 30% - 50% in the upcoming months. 22% of surveyed think this current situation will have a small impact, decrease only up to 30%. However, 24% expect a more severe hit, fall in the dealmaking and lending activities by 50% - 80%.
4) Almost all, 96% of industry professionals anticipate exits volume drop and extending of holding period of some assets.
5) 69% of surveyed think that the decline in fundraising this time around will be less severe than in 2008–09, when the global total dropped more than 50%.
Interested in looking into additional relevant data? Then join the webinar series and get insights from the most accurate data gathered by our media partner Preqin. The latest data on the impact of COVID-19 on PE Market, with regards to the impact on fundraising and deal flow, presented at our first webinar, are now available here.
Moreover, we appreciate Silverfern supporting us also with this new online format. We know Silverfern as an opportunistic investor across its entire 20-year history. This means Silverfern was prepared to invest very cautiously or even not at all in periods where valuations seemed artificially high and debt was almost “free” and to invest conservatively, in times when markets corrected. Silverfern was a very active investor in 2009 and 2010 when it opportunistically took advantage to drive value creation for its investors.
They believe that the current market situation, while presently very volatile, will provide some correction in the pricing of certain assets, which will, in turn, provide opportunities for Silverfern to again capitalize on its unique investment approach to capture highly attractive risk-adjusted investment returns. Silverfern’s founding family itself is making a substantial commitment to Silverfern ́s latest Fund III.
Do you want to learn more about why the Silverfern strategy might be the right one for the investment period ahead influenceby the Covid-19? click here