A recent publication by Bain & Company discusses the sudden changes to the global private equity industry during the GFC, resulting in adjustments in deal structure, fund raising, performance and other key factors. These changes forced several major PE houses to change their portfolio management strategy to accommodate for the stress on their resources, to help their investee companies handle the downturn and to lay the investment foundation for when conditions improve.

Private Equity backed companies in China have performed better than their public listed peers. With a particular focus of the social and economic impact of PE-backed companies in China, this recent study by the European Union Chamber of Commerce in China and US business consultancy Bain & Company have illustrated:

PE-backed companies in China result in –

-        better financial performance

-        higher company tax payments, and

-        the expansion of China’s domestic consumer goods and retail  industry

The most recent volume of the WEF series of working papers on Globalisation of Alternative Assets looks into the governance structure of the LBO business model, employment within PE-backed companies and the maturing alternative asset sector in emerging economies.

This discussion paper by Tom Rotherham and David Russell looks into the recent trends in Responsible Investing and its effects on the private equity investment model, both from a GP and LP perspective.

This study looks into the affects of the sub prime crisis on the private equity business model. Was high leverage the only reason why private equity firms were successful or was there real value created due to noticeable operational changes in portfolio companies, producing high returns. As a result, how will the private equity model behave in the face of significant reduction in debt issuance over the coming cycle?

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The recently released performance report by Preqin analyses private equity partnerships as at 30 June 2009. As compared to the previous Preqin performance report ending March 2009, there is evidence of a slight improvement in the ‘All PE’ horizon IRRs for 1 and 5 years. Moreover, ‘All PE’ 1, 3, and 5 year horizon IRRs shows better performance relative to the S&P 500 and MSCI Europe Horizon IRRs.

This report by Preqin analyses the returns generated by over 4,800 private equity funds covering 65% of all capital ever raised. Over the last year, private equity strategies have produced negative one-year returns; however, they are still generating better returns relative to public markets.

The Pepperdine private cost of capital survey (PCOC) looks at the behaviour of senior lenders, asset-based lenders (ABLs), mezzanine funds, private equity groups, and venture capital firms in the US. It examines the benchmarks that must be met in order to qualify for capital, how much capital is typically accessible, what the required returns are for extending capital in today's economic environment, and outlooks on demand for various capital types, interest rates, and the economy in general.

Preqin surveys the opinions of public pension plans and other investors in the US to assess the potential impact to the private equity and alternatives industry of the introduction of SEC proposed rule release IA-2910, which includes potential effects for the use of placement agents.

Private equity fundraising has been significantly down in 2009 compared with recent years. Is this due to changing sentiment towards the asset class? When are investors going to return to the market? What are the key areas of interest? Are investors satisfied with their returns? Read Preqin's latest research report based on a survey of over 100 of the leading investors in private equity.