{"id":40391,"date":"2023-07-25T17:34:23","date_gmt":"2023-07-25T21:34:23","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/dont-try-to-time-the-market-kkrs-stavros-says\/"},"modified":"2023-07-25T17:34:25","modified_gmt":"2023-07-25T21:34:25","slug":"dont-try-to-time-the-market-kkrs-stavros-says","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=40391","title":{"rendered":"Don\u2019t try to time the market, KKR\u2019s Stavros says"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS\/Brendan McDermid\/File Photo<\/span>
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By Maiya Keidan<\/p>\n

(Reuters) – Private equity firms should stay consistent in deploying capital even when facing a more challenging backdrop for dealmaking, KKR & Co (NYSE:)’s co-head of global private equity, Pete Stavros, said on Tuesday.<\/p>\n

The landscape is littered with people who try to call the market but no one is smart enough to do that, Stavros said at a Reuters Newsmaker event.<\/p>\n

“I would say that is the mistake private equity investors have made in the last two years is that they have over-deployed into a hot M&A (mergers and acquisitions) market,” he said.<\/p>\n

He added that while KKR does not maintain strict deployment rules, the firm tries to invest around 20% of the fund each year.<\/p>\n

Private equity-backed deals totaled $278.6 billion in the first half 2023, a decrease of 49% from a year ago, and the slowest first half for private equity dealmaking since the first half of 2020, according to Refinitiv.<\/p>\n

Stavros said KKR, which had $510 billion in assets as of the end of March, is benefitting from operating in an environment that is great for new investments.<\/p>\n

He said that higher rates and more expensive leverage lead to constrained purchase prices. <\/p>\n

“Buyers, and your competitors, tend to be a little more nervous, and you can generally find better opportunities.”<\/p>\n

He pointed to recent deals in the U.S., including taking valve and pump maker Circor and chemical maker Chase private. KKR is set to make the purchases for $1.7 billion and $1.3 billion, respectively.<\/p>\n

On collecting assets to invest in new opportunities, Stavros said while many investors in private equity firms feel a little over-allocated, they are aware that when markets are more volatile, that is the time to commit to the sector.<\/p>\n

“Everyone knows, historically, these tend to be the more interesting times to commit to illiquid alternatives,” he said. <\/p>\n

“If you look at historical periods of time where the S&P (500 index) was flat, private equity outperformed in the hundreds and hundreds of basis points.”<\/p>\n

He said the next five years should be good vintages for private equity firms.<\/p>\n

By contrast, the last two years of putting money in the ground in a very high-valuation, low-interest-rate environment probably may not turn out as well.<\/p>\n

Despite the positive outlook for private equity, Stavros said KKR was “not making a ton of hires.”<\/p>\n

Regarding geopolitical issues, Stavros said China remained “complicated” but that the firm continued to invest.<\/p>\n

KKR thinks about risks for investors, he said.<\/p>\n

Stavros’ nonprofit Ownership Works, which helps companies grant stock to entire workforces, is expanding.<\/p>\n

“We’re working with labor unions and nonprofit foundations and pension funds, so we have like 100 organizations around the table trying to make this a more common model,” he said.<\/p>\n

“I think this is how capitalism should work and is where we need to head.” <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS\/Brendan McDermid\/File Photo By Maiya Keidan (Reuters) – Private equity firms should stay consistent in deploying capital even when facing a more challenging […]<\/p>\n","protected":false},"author":1,"featured_media":2360,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-40391","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nDon\u2019t try to time the market, KKR\u2019s Stavros says | iFintechWorld<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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