Challenging market conditions driving creative approach to funding distributions
Private equity groups were getting “more creative” in finding ways to generate cash for their investors given the tougher backdrop, said David Martin, a partner at law firm Linklaters. The last time buyout firms made less cashing in on their portfolio companies was in 2013. In the meantime, firms have been increasingly using margin loans and net asset value financing to fund distributions to investors. Likewise with continuation funds. Despite the more challenging market conditions, competition for high quality talent at all levels within potfolio companies remains high. People that can do more with less, at pace and who can drive value creation, remain at a premium.