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Private Equity continues to deliver good growth

Carnegie Listed Private Equity returned 4.4 percent in July, and is up 31.6 percent for the year to date. The best performers this month were Blackstone, HG Capital and Ares Management, followed by Eurazeo and 3i. It was another month of strong growth for many different types of holdings, with no specific strategies or geographies standing out. The quarterly reports that have been published were very strong. Blackstone, KKR and Apollo are reporting distributable profits this year at double the level of the first half of last year. AuMs and underlying values have increased sharply.

The markets are characterised by a high level of activity and a lot of divestments at attractive price levels. Last year, on the other hand, we saw significantly fewer divestments and an emphasis on investments from opportunities at low price levels. It will be exciting to see the development of these investments in the coming years. The crucial thing for value creation, however, is the Private Equity model’s active business development, with a focus on growth and profitability improvements. There are quite a lot of share buybacks being made among our holdings. This includes Berkshire Hathaway, which is led by perhaps the world’s leading investor Warren Buffett. Berkshire has been at a quarterly repurchase rate of just over 1 percent of the company since last year.

We are upbeat about the prospects for Private Equity to deliver good value growth going forward. The underlying portfolio companies are developing well, and financing opportunities are good at low interest rates. The interest in investing in Private Equity is very large, and our fund companies have continued to experience strong flows into new funds.

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