Global Private Banking Investment Outlook Report Private Markets Amid sharp declines in public As the macroeconomic picture worsens, have seen strong levels of fundraising markets, Private Equity (PE) most PE firms have been forced to in Q3 compared to last year. Despite valuations have dropped and re-examine and write down the value the headwinds in the broader market, continue to soften, but less than of their investments on the back of investor appetite for PE remains strong. public markets. Fundraising and lower public valuations, higher costs We have seen an increase in value of exits have dropped too, but activity of capital, and a deteriorating growth $166.1bn in Q3 compared with the same levels should still remain in line outlook. That said, in many cases, period last year of $157.9bn. However, with historical averages. Despite the valuation compression has been we are witnessing a lower number of the challenging environment, we muted, partly explained by the lower PE fund closings (3,347 vs 1,6242) as believe PE provides opportunities to correlation between public market equity Limited Partners (LPs) are focusing on take advantage of targets, especially valuations and private market valuations. re-ups, resulting in a thinning of the in sectors where public valuations Manager performance continues to vary herd and leading to more “mega-funds”. have suffered the steepest declines considerably and the gap between Looking ahead, we think many LPs (such as technology and healthcare). top and bottom quartile funds is have already hit their allocation targets And we believe there are attractive increasingly apparent. for the year and Q4 figures will be deals in the secondary market to While fundraising activity continued more subdued. acquire high quality exposures at to decline, it remains in line with In the secondary market, overall discounted levels. historical quarterly averages and we transaction volumes in H1 2022 36