Private Equity Investments Are Going to Lose Value. How Much Is Anyone’s Guess. (Institutional Investor)

Managing Partner Jim Scheinberg recently spoke with Institutional Investor about private equity investments amid the COVID-19 pandemic. 

“There will probably be several rounds of markdowns on the private equity side,” Scheinberg said by phone Thursday. “You’ll get markdowns from this initial wave because valuations are going to come in from the public market.”

Some investors are looking to past financial crises for guidance on how to act now.

According to Scheinberg, private equity investments with vintage years 1999, 2006, and 2007 underperformed because valuations were high leading up to both the dot-com bubble burst and the 2008 financial crisis.

“It is likely that private equity will see a similar pattern with 2018 and 2019 vintages,” he said. “But that depends on the virus and how long and deep the economic crisis is right now.”

Read the full article at Institutional Investor.

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