Private Re-Run
Hedge funds have dabbled with private capital before. Picking stocks is one thing; knowing how to grow a company is another.
During the last recession, hedge funds began showing up to invest in private equity deals. But then they disappeared, said Michael DiPiano, co-founder of NewSpring, a private equity firm established in 1999.
“Many found it too difficult,” he said. “The good players spend years building their knowledge base to be good at what they do.”
That won’t stop hedge funds from trying again. About 35 percent of hedge funds offer private credit products or plan to by 2020, and 28 percent aim to provide private equity investments, according to EY’s survey.
“This is a story that has been growing over the years, but has accelerated and come more into focus in 2018 given the environment, and is likely to continue in 2019,” said Credit Suisse’s Gasparro.
This article provided by Bloomberg News.