In Q4 2020, market participants noted improving comfort with company and industry fundamentals, outlooks, and the ability to weather a second wave of the virus.
How do you value a SPAC? With a surge in SPAC IPOs resulting from the COVID-impacted economy, SPAC valuations should not be given equal consideration.
The private equity and credit markets held up remarkably well in the face of a global pandemic and are adjusting to the “new normal.” Market participants should go into 2021 with heightened vigilance as the impacts of the pandemic may not have yet entirely played out.
On track for recovery: Pandemic implications, not all doom or gloom.
In Q3 2020, secondary equity and credit markets rebounded, primary equity and levered finance markets reopened, and the price of risk declined.
As we head into Q4 2020, the new normal in private capital markets has fully set in, generally defined by prudence and caution, albeit a work in progress.
A Q2 2020 update on credit spreads and required returns.
Considering the virus’ material impact on specific industries, we’ve seen a greater emphasis on secondary industry-specific loan indexes when controlling for credit risk.
The COVID-19 market dislocation could be compared, not only to the Great Recession, but also—inversely—to the “irrational exuberance” of the dot-com era.
The only comparable event to the spread of the virus for modern private capital markets is the Great Recession, but there are some key differences this time.