The stress that COVID-19 is placing on financial markets is reverberating through the private equity industry. On March 26, 2020, Debevoise’s Private Equity Group held its first briefing on how the crisis is affecting deals, liquidity, fundraising and more. To access the on-demand recording, please click here. Highlights of the presentation include the following:
THE CURRENT DEAL MARKET
- Put down the pencils and pivot
- In pre-close purgatory, it’s 2008 all over again
IMPLICATIONS OF GOVERNMENT ACTION
- In the United States, heavy fiscal artillery but fine print
- Europe takes a multipronged approach
PORTFOLIO COMPANY FINANCING
- Draw down, but mind the ratios
- Open the distressed debt playbook
- Stepping in from the top
FUND-LEVEL FINANCING
- For capital call financing, relatively business as usual
- NAV continues to move upstream
IMPACT ON SPONSOR FUNDS
- Balancing communication with confidentiality
- Active fundraising is continuing but adapting