Trends Watch: Private Equity Growth

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks Matthew Gibbons, Director of Private Equity, Manhattan West Asset Management.

What is your outlook for private equity?  

Private equity is going to continue to prosper. A lot of trends that were just beginning to emerge prior to the 2020 global shutdown are accelerating going into this next cycle and consumers are re-evaluating business models. We will continue to see more economic growth and innovation happening in the private sector going forward. For private equity and alternative investments, I expect to see more capital looking for exposure to these asset classes in both near and long time horizons.

Where do you see the greatest opportunities and why?

The greatest opportunities will be for focused managers that can find companies that continue to generate profits. As an investor evaluates different opportunities in this environment, a black swan event like 2020 creates buying opportunities into companies that have strong business models and management teams that are positioning themselves to capture marketshare. I am currently seeing these types of opportunities in sectors that are defensive (media and the ever-growing consumption of content), sectors that are capitalizing on accelerating tailwinds (digital marketplaces and the consumer shift online), and sectors that have evergreen demand (sports, health and wellness).  

What are the greatest challenges you face and why?

In the lower middle market, the greatest challenge is being focused on sourcing attractive deals and some managing the added complexity of conducting some of the due diligence remotely. However, PE as a whole has adapted to these new logistics and deals are still being done, especially by managers that have proprietary deal sourcing channels and expertise.

What keeps you up at night?

What keeps me up at night is ensuring that the principles of sound PE investing are top of mind for every opportunity we evaluate. We need to focus on strong companies and strong management teams that can perform in both bull or bear markets. In addition, we need to stay disciplined on what fundamentals are attractive to the PE asset class and make sure we don’t fall into herd mentality in any of the sectors we are evaluating.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.