Oxane Partners, a leading technology-driven solutions provider to the alternative investments industry, has released its special report ‘COVID-19 and the Private Markets’. Based on a market survey of 120+ senior professionals, the special report reveals that private investment firms are following a ‘pause and prepare’ approach – pausing new investment activity and getting better prepared for the future.
The report explores the extent of disruption, top priorities of investment firms, change in investment outlook and emerging themes across private market asset classes. The market survey, targeted at investment professionals across the UK, Europe and the US, found that one in three respondents highlighted prioritizing the adoption of a portfolio management solution and mobile technologies as they prepare to build out their capabilities in the new world order.
“The COVID-19 pandemic has caused significant disruption in private markets across the globe. Operating within the constraints of remote working, investment firms became more aware of the operational gaps in their investment workflows and the need to be agile by leveraging cloud, mobile and digital workflows. It became evident that having an investment management technology in-place was the key difference on whether you are being affected or being disrupted by the pandemic.”, says Kanav Kalia, Director at Oxane Partners.
The survey also revealed that 50% of the respondents have highlighted that the pandemic led to a considerable reprioritization of investment management technology plans. From an economic recovery point of view, just 4% expect a strong V-shaped recovery while the rest maintain a slow recovery with a macro outlook of a recession or a global depression.
“We expect that as a fallout of the COVID-19 pandemic, a new wave of digitalization will accelerate across the private markets. As investment firms prepare for a post COVID-19 world, on-the-go and always-on access to data, systems and collaborative tools will become more mainstream to ensure smoother investment operations. As we deal with this unprecedented level of uncertainty, we stand committed to helping our clients navigate through these turbulent times.”, commented Vishal Soni, co-founding partner at Oxane Partners.”
Other key survey findings highlighted in the special report include:
- Investment operations: Over two-thirds of the respondents rated the disruption to their investment operations 3 or higher on a scale of 5 with mere 3% saying there was no disruption at all, highlighting the unpreparedness to tackle such a pandemic.
- Immediate fallouts: Deferring or cancelling planned investments, adjusting returns guidance and being more cost conscious were cited as the top three immediate fallouts of the impact of COVID-19 on private markets.
- Investment outlook: Over 70% of survey respondents have a favorable investment outlook towards distressed debt citing better attractiveness in the coming few quarters. Real estate saw the biggest drop with 50% saying the investment attractiveness of the sector has taken a hit while half of the respondents maintain their outlook on renewables and infrastructure.