When will the next distressed investment cycle begin?
“The last wave was the financial crisis in ’08, ’09—you had that from all the excesses of ’06, ’07. Similarly, if you look at the number of bond and loan deals since 2011, we’re starting to peak here in ’14,” Jeff Davis, a partner at private equity fundraising firm Eaton Partners, said in noting recent fundraising for new distressed-focused private equity funds. “We expect there’s going to be an increased level of defaults in ’15, ’16, ’17. I think it’s a great time.”
Will pensions keep up their PE love affair?
“PE allocations generally are at great levels,” said Davis of Eaton. “Pension funds will continue to drive those allocations as so many are more comfortable these days with increased risk and taking exposure to private equity to meet those long-term liabilities.”
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