Private equity deals are projected to rise, with the momentum experienced in late 2020 expected to continue in 2021. For instance, in the first five months of 2021, there was an increase of 21.9% compared to the same period in 2020.
The rise in private equity deals has been attributed to low-interest rates and increased fundraising from investors and organizations. These contributions have seen private equities raise more than $150.1 billion, with more funds expected in the coming months due to the involvement of experienced private equity professionals from established and new firms. Additionally, it is of the essence to bear in mind that the increased competition among PE firms and increased pressure on expected returns will likely trigger the diversification of alternative asset managers who will probably hold more asset classes.
Insurance companies have also become the newest target for private equities. This has been attributed to the increased demand for more money from insurance companies. In addition, these companies have on-demand insurance products such as long-term care insurance, life insurance, and annuities which represent a wide range of long-dated liabilities that require support from long-duration assets.
Tax law activities are also expected to spur more activities as private equities, and their founders strive towards locking their profits and increasing their capital gains and taxes. Environmental and social governance considerations will also increase, with the likely outcome being enhanced sustainability, value creation, and improved dealmaking. This will enable private equities to analyze risks through their portfolios.
Professionals in the private equities sector, such as Gary McGaghey, expect the private entities sector to see an increase in the number of funds injected to support organizations and companies in the PE industry. Gary McGaghey is a globally experienced CFO who has been at the forefront in driving transformation and overseeing value creation. He is also the Group Chief Financial Officer at Williams Lee Tag, a position he has held since September 2019. Gary McGaghey is highly experienced in all aspects of treasury, finance, governance, global procurement, risk, and IT.