Already we hear that PE managers are working closely with their portfolio companies to identify and implement measures to ride out the storm. Banks in the Netherlands announced a six month reprieve for small business loan repayment terms and are apparently open to considering this for larger credit lines as well. The challenge will be to take this initial positive step and transform it into collective action from both Lenders and PE houses. The first step being to stabilize their current investment companies and then utilize the record levels of funds raised by PE to drive new investment and growth.
Opinions were divided at the start of 2020 as to whether the new decade would bring growth or a recession. The impact of the Covid 19 virus is creating an unprecedented environment for Private Equity. 2020 will challenge PE as never before to prove that it can play a positive role in an extremely challenging global economic context. What role will and can Private Equity play in 2020?