Over the course of 2022, public asset classes experienced a “valuation reset,” or a market correction. We saw valuations move materially lower over the last year, with bond valuations resetting the most on the back of rates rising from 0% to 4.5% through 2022 (Source: Bloomberg, iCapital Investment Strategy, as of January 12, 2023). Equities also reset lower and at current, do not appear as expensive as they were before (Source: Bloomberg, iCapital Investment Strategy, as of January 9, 2023). This current dislocation in the public equity markets will continue to impact private market valuations in the coming quarters, presenting an attractive opportunity for investors to take advantage of the reset in valuations in the private equity space. Given the timing and information lag inherent in private markets, this dynamic has not yet been fully realized at the deal level, but further contraction in multiples is expected. While this may lead to multiple compression in existing portfolios, a valuation reset may create an attractive buying environment. Historically, private markets take six to 12 months to fully reflect the valuations environment in the public markets. We are in the midst of this private markets valuation correction, and the pricing expectations […]
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
K&X Design and Investment Technology, LLC
Invest The Invisible Impact
