How COVID-19 Could Affect Private Capital Investors

A new blog by Preqin explores what COVID-19 could mean for private capital investors.

FRG and Preqin, an industry-leading provider of data, analytics and insights for the alternative assets community, partnered to develop a novel cash flow prediction model. The model is guided by FRG’s innovative methodology and powered by Preqin’s fund-level cash flow data.

Analysts used this tool in conjunction with the release of FRG’s Pandemic Economic Scenario to assess the impact of a recession triggered by the novel coronavirus on capital calls, distributions and net cash flows.

In the blog, Preqin’s Jonathon Furer examines an analysis created by FRG.  Jonathon explores the pandemic’s effect focused on 2017-2019 vintage funds, which represent 72% of the $2.63tn in callable dry powder that the private capital industry has raised since 2000. “Assuming the global economy undergoes a significant but brief recession, and then recovers, our model suggests GPs will respond in two stages,” Furer writes.

Read about the projected stages in the full analysis, Why COVID-19 Means Investors Should Expect Lower Capital Calls and Distributions in 2020.

FRG has 20+ years of experience applying stress testing to portfolios for banks and asset allocators. We developed this unique model enabling investors to stress test private capital portfolios for a wide range of macroeconomic shocks. We are ready to help investors looking to better understand portfolio dynamics for capital planning and pacing, or risk control for a black swan event.

Download the Pandemic Economic Scenario or get in contact with Preqin at info@preqin.com for the most accurate private capital cash flow forecasting model.

If FRG can help you better understand the effects of macroeconomic shocks on your private capital portfolios, contact us at info@frgrisk.com.