The golden age for private equity has “come to an end”, Singapore’s GIC has warned.
The $700bn investment giant has warned that many of the tailwinds for private equity firms – including high valuations, lower leverage costs and low interest rates – had been replaced by much tougher market conditions.
However, GIC said it would be allocating money towards logistics, infrastructure and other inflation-insulated assets while seizing on discounted deals as some investors looked to cash out.
Wednesday’s annual report showed GIC delivered an average annual return above inflation over the past 20 years – its main performance metric – of 4.6% for 2023, up from 4.2% a year earlier and is its highest level since 2015.
The fund does not publish its assets under management but has increased its allocation to private equity to 17% of its portfolio from 9% in 2017.
