North American market trends: Insights from leading investors

Discover the latest in private capital from our experts in New York!

On geopolitics

“The most powerful tool we have for conflict resolution is the US economy. We should shamelessly use the tools of innovation and technology in a way that means we don’t have to send our kids to risk their lives in a difficult place. So often conflicts are about economics – resources and money. We have the capacity to use these for the good not only of Americans, but also of humanity.”

Mike Pompeo, 70th US Secretary of State

On relative value in today’s environment

I am frequently asked today: if I have $1, should I invest it in private credit or private equity? I think that’s the wrong question. More than ever before, we should be asking about diversification or allocating on a geographic basis. A lot of people are working on the basis that we will go back to 2019. That won’t happen; we’ve had a regime change. We need to think about diversification, not from an asset class perspective, but by geography. Different parts of the world are at different points. For example, if you like technology, where do you like technology? And you need to get out to see it.

Elizabeth Burton, Managing Director, Client Investment Strategist, Goldman Sachs Asset Management

On private debt in Asia

China was the preferred investment location for a long time. If you invested in private equity and venture capital in China more than 10 years ago, you would have done well. China is now going through major restructuring and some strategies, such as private credit, may work better in this current market environment. Compared with China, India is now the brighter spot. India has definitely benefited from investors withdrawing from China and we hope to see positive returns from India.

Rebekah Woo, CEO and CIO of Singapore-based single family office, Pioneer Generation & Serene Group of Companies

On early-stage venture capital

When it feels like everything is falling apart and financial markets are down, that’s the best time to be investing in early-stage venture capital. It may have felt like everything was rosy in 2020 and 2021, but that was probably a tough vintage to be investing. Valuations were high, entrepreneurs had an enormous amount of leverage in negotiations and it was cool to be an entrepreneur. It’s very different today and anyone wanting to be an entrepreneur is taking quite a risk. Right now, we are in a down market with a new transformative technology emerging – AI. It feels like deal flow in early-stage is down, but the quality is much higher than it was two years ago. We can invest at lower valuations and we have time to build out platforms before the market recovers – it’s a good time to be investing.

Billy Draper, Managing Partner, Path Ventures

On fundraising

The private equity fundraising environment is abysmal right now. If you have a big fund, an investor relations teams and multiple products, you are perpetually fundraising and are probably fine. Yet smaller mid-market funds with little or no dedicated investor relations resources will really struggle. LPs are overweight in private equity and if they are looking to shrink their portfolios, they’ll likely gravitate towards the IBMs of the private equity world because it’s just easier to allocate there. It’s a very difficult arena and will continue to be so over the coming year as it doesn’t look like valuations will come down in private markets.

Jim Pittman, Executive Vice President and Global Head of Private Equity, British Columbia Investment

On deal-by-deal managers

This is an ideal time to be backing managers on a deal-by-deal basis. There are many high quality teams and investors who, 18 months ago, would have breezed through a first-time fundraising in the space of six months, yet today are struggling to attract blind pool capital. One of the best ways to get to know a manager is to be in the trenches with them on a deal, see the process and how the deal performs.

Michael Barzyk, Global Head of Private Equity,
Allstate Investments

The slowdown in distributions is affecting LPs’ future deployment. Until that balances back out, LPs will continue to have a lot of pressure points on their future plans – it’s a real issue when trying to add new funds or when existing managers come back to us.

Agata Praczuk, Director, Metlife