Private markets grow and thrive amid industry trends

Wednesday, September 15, 2021 | By Bhagesh Malde, General Manager & Head of SS&C GlobeOp Private Markets

Private markets grow and thrive amid industry trends

Data collected since the 2008 financial crisis continues to support the long growth trajectory of the underlying strategies and assets of credit, real assets and private equity. Following the trends, we know now the strength and resilience of these assets leading to what we now call private markets. Private markets fill investors’ need for diversification, yield and maximized returns.

Along with alternatives, private markets have filled the gap where public markets have underperformed. “The most in-depth research continues to affirm that, by nearly any measure, private equity outperforms public market equivalents (with net global returns of over 14 percent)” (McKinnsey, Global Markets Review, April 2021).  One of the more recent trends supporting this is the Secondary Markets story of 2020, capping off a strong few years of growth in the sector.

The COVID-19 pandemic created an interesting environment to test this growth, and PE, fundraising and credit proved to be resilient in challenging times. Technologies that support work-from-home have fundamentally changed the way we do business across industry sectors. While real estate has seen a downturn during the pandemic, there remains a tight supply and continuing demand in the housing market. Meanwhile, the $1 trillion bipartisan infrastructure bill making its way to the House will be a headline for years to come.

Despite the significant changes to how business has been conducted over the past year and a half, private equity has continued to thrive. There were more PE buyouts in 4Q 2020 than the preceding year, despite the inability for GPs to travel and lack of in-person meetings. Technology prevailed in filling the gap in ways we could not have imagined before the pandemic, and disruptions to deal-making were unimpeded. Fundraising and allocations have increased in 2021, even though we are still in the midst of global crises, with the pandemic in addition to the risk of global warming and the impact on the environment.

As environmental concerns permeate our daily lives, ESG continues to drive investment decisions across all asset classes. The pace of change of how we view ESG and investing has shown that investors are increasingly focused on ESG when making investment decisions. GPs and LPs are taking the cue, implementing, and tracking their own progress with diversity, equity and inclusion metrics in preparation for what may become global mandatory reporting to investors.  SS&C integrated regulatory solutions into our core capabilities to help clients address the requirements for SFDR and Taxonomy regulations. We continue to build best-in-class solutions to provide managers and investors with independent ESG reports and data to better understand, monitor and manage ESG risks and exposures.

SS&C invests in the resources that will provide our clients with the tools and expertise they need to be successful. We employ more than 24,000 staff worldwide and continue to grow to meet the demand of our clients and to manage the risk of a constantly changing market landscape. Our private markets senior management have, on average, more than 20 years of experience in the industry. SS&C’s front-to-back technologies support all facets of alternative investing for private markets and include some of the most advanced, customizable investor solutions and interactive analytics and reporting tools. Our proprietary technologies have been awarded and acknowledged across multiple industries year over year, but it is our people that remain our greatest strength. They are at the center of innovation and creative solutions to help solve some of the most pressing issues of the day for the private markets industry. Merging our real assets and private equity groups into the new GlobeOp Private Markets group will provide greater benefits to our clients. As always, we remain steadfast in our commitment to service our clients and the global marketplace with robust and innovative technologies and an experienced global team. 

If you would like more information on SS&C GlobeOp Private Markets and the services and technologies that help support the industry, download our "SS&C's Private Markets" brochure.

Alternative Investments

Theme picker