Research Uncovers Trends, Insights and Strategies for Private Equity Sponsors and Investors Navigating the Middle Markets in 2023
NEW YORK, Feb. 23, 2023 /PRNewswire/ -- Apogem Capital, in partnership with Coalition Greenwich, today released a new research report analyzing how middle market private equity sponsors are navigating an environment characterized by volatile public markets, geopolitical uncertainty, and persistently high inflation. The report titled, "Exploring the New Paradigm Shift: Middle Market Private Equity Research," features trends and insights from more than 100 interviews with managing directors and partners at middle market private equity sponsors in the US.
"Private equity sponsors continue to monitor new and emerging risks in an ever-evolving investment landscape," said Louise Smith, Managing Director, Private Equity at Apogem Capital. "While investors are assessing the impacts of heightened inflation, accelerating interest rates and market turbulence, middle market GPs may be well-positioned to navigate this environment – using these risks as unique investment opportunities in the middle market."
The research revealed sponsors in the middle market could benefit from less competition for assets and more consistent opportunities for attractive exits relative to larger peers and sponsors operating in other segments of the market. Overall, participants articulated five strategies they are adopting to maximize the advantages in the middle market to negotiate challenging market conditions.
Key strategic takeaways from the research data include:
"The investing and macroeconomic environment continues to evolve. For some investors, this is their first experience investing or managing a company through a rising rate and potentially recessionary environment, outside of the COVID-related downturn in 2020," said David Fann, Senior Managing Director and Vice Chairman at Apogem Capital. "While middle market sponsors are preparing for a challenging period ahead, we believe cycle-tested managers with unique value-add should be well-positioned to navigate a complex environment, and potentially produce attractive results. Private markets are nearly impossible to time - we believe that staying disciplined with consistent capital deployment across a diversified portfolio has generally performed best over the long term."
To read more about the survey results, download the complete research report here.
In the third quarter of 2022, Coalition Greenwich, in partnership with Apogem, interviewed 102 managing directors and partners at middle market private equity sponsors in the United States. These in-depth phone conversations centered on market conditions in 2022, as well as investment trends, exit strategies, funding sources, and emerging challenges and opportunities.
About Apogem Capital
Apogem Capital was formed in April 2022 through the combination of PA Capital, Madison Capital Funding and GoldPoint Partners to create a singular and unified, world class private markets' investment firm. With approximately $39 billion in assets under management as of September 30, 2022, we believe Apogem has the deep relationships, data, and history in the middle market to deliver innovative solutions to both clients and sponsors. Apogem Capital offers investors access to the middle market's growth engine through investments in leading private companies and funds. The Firm manages a streamlined suite of capital solutions, including direct lending, junior debt, primary fund investments, secondary investments, equity co-investments, GP stakes, and private real assets. Apogem Capital is a wholly owned subsidiary of New York Life Insurance Company ("NYLIC"), through New York Life Investment Management Holdings, LLC ("NYLIM").
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