Ficklin said Polen’s growth funds have been down about 30%. Mary Kate Bertke, managing director and head of Investor Relations at Boston-based Great Hill Partners, said that her firm has been overall pleased with the status of its growth funds, but admitted that the portfolio has come down a little, although much less significantly than the public market.
Welsh, for the most part, said it is business as usual. Although he did say given the current markets, caution will be on their minds.
“Now is not a time to overreach and overspend,” Welsh said. “It’s a time to be thoughtful about where you are investing and give yourself the flexibility to be sure that if the general macro environment continues to be a challenge, then you are not putting yourself in a place where you are overspending capital.”
Bertke said that Great Hill will not be changing how it conducts business moving forward. If private market valuations align with the public market, there could be some buying opportunities in the years ahead, she said.
“We haven’t changed anything on our end. We’re still actively looking for new and exciting companies,” she said. “A lot of the owners of the types of healthy companies we look for are not looking to transact at these depressed valuations, so there has been a slowdown in the volume of opportunities in recent months.”
She said that the individuals who built these companies know that they have a strong asset and are looking for a high price for it. That means they might have to wait to sell for the valuations to come back up.
Given this potential of healthy companies biding their time, Bertke said that there are opportunities that exist in the market taking into account the possibility of a recession or other economic factors that could upset things.
“With all those caveats, we remain excited about a backlog of healthy companies, and we continue to believe that in the next 12 to 24 months a lot of these businesses will decide to transact,” she said. “The companies in our portfolio are healthy businesses changing the way we work and live and we look forward to more opportunities ahead.”
Ficklin said that if an investor has a strong enough stomach, now is a good time to get into growth funds.
“If you're a long-term investor and you're putting money to work that you don't need access to for the next five plus years but you're truly investing for the future ... I think this is a decent time to put money to work,” he said. “It doesn't mean the market won't see a rough patch here for another six or 12 months or that multiples might come down a little bit more.”