The article examines the largest private equity funds to close in 2020, how the coronavirus pandemic cemented developments that have been taking shape in the industry for years, and how the 2021 landscape will likely be shaped by several key trends.
Willkie partners Phillip Isom and Lior Ohayon were recently interviewed by Law360 for an article examining the biggest PE funds to close in 2020, the impact of the pandemic, and key developments expected to shape the 2021 landscape: industry consolidation due to industrywide preference for well-established asset managers, increased focus on the technology sector and diversified industries, sustained interest in the secondaries market and investors' focus on North American and European markets.
In the article, Mr. Isom discussed how the prevalence of funds investing in diversified sectors was one side effect of well-known managers dominating 2020's fundraising scene. Investors in 2020 also sought out managers who centered their strategies on technology because the sector has reliably generated strong returns in recent years, he noted.
"There's a thought that being in those types of sectors or investing in funds which have demonstrated expertise and [success] in those sectors is a good place to be," Mr. Isom said.
In discussing sustained interest in secondaries, Mr. Ohayon noted that investors have also shown that launching a secondaries fund — which traditionally helped limited partners exit private equity funds by purchasing their stakes — is still a rewarding bet for asset managers, despite the impact of the pandemic this year.
"When [the pandemic] all started, I think a lot of people really thought it was going to be Armageddon," Mr. Ohayon said. "But we have seen every day there are deals that are announced — pretty sizable ones as well — so it seems to me, people have been able to get over the valuation."
“What 2020's Largest Funds Say About State Of PE Industry,” can be found here. (subscription required)