Capital ventures forth … cautiously
Everyone likes venture capital. It’s one of the feel-good asset types that fiduciary investors can believe makes a difference to society. Unfortunately, for the past 10 years it has also, on average, lost money.
Everyone likes venture capital. It’s one of the feel-good asset types that fiduciary investors can believe makes a difference to society. Unfortunately, for the past 10 years it has also, on average, lost money.
Cambridge Associates, the US-based asset consultancy, is to open a Beijing office – its third office in the Asia Pacific region – and is sending a private equity specialist there from London.
Venture capital has been through probably its worst decade ever as an institutional investor asset class, as private equity – as dominated by buyouts – recovered over the past few quarters from some of the ground lost during the global financial crisis.
The collapse of a private equity manager lacks the impact of a hedge fund failure: it’s like a “slow-motion train wreck,” says Chris Hunter, managing director of Cambridge Associates in London. Now that fundraising among private equity managers is down, leveraged finance is scarce and the market for exits is weak, mega-buyout funds are busy
For US private equity and venture capital managers, Q2 generated the best returns since the end of 2007, when listed markets began sliding, and for the first time since its introduction mark-to-market valuation methodology benefited managers, according to research from US Consultancy Cambridge Associates.
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