The world of finance has taken a major hit during the coronavirus pandemic. With businesses closing shops, job losses, and cost-cutting across the globe, has brought the worst economic downturn in all the major countries.
Numerous industries ranging from hospitality to travel and aviation have taken a severe hit during the crisis, however, the worst-hit are the industries in the financial world. One of such industries to take the worst hit is – private equity firms.
While there is no clear data that suggests how the coronavirus crisis had or would affect the private equity industry, especially the US private equity firms, the situation is ambiguous.
Let’s have a look at how top private equity firms in Austin TX are dealing with COVID-19. But before that, just know that there is some positive and negative news related to the US private equity firms when it comes to the global pandemic.
There is no doubt that the economy has slowed down and lots of businesses have shut down their operations. However, what we forget is the fact – this is the time when organizations need financial advice the most and that’s where private equity investment firms and private equity investment professionals showcase their prowess.
That’s one of the reasons why top private equity firms in the US are acquiring wealth managers and are actively hunting for wealth management firms.
As stated earlier, this is the crucial time for businesses and startups who have or are facing huge losses with an economic downturn. The businesses globally would want to take the advice of financial experts who could help them deal with the crisis. It is a given that advisory firms are a reliable source and offer a welcome annuity stream of reliable income despite the market volatility
Interestingly, despite the economic slowdown and huge financial losses, the private equity firms in the US are positive and upbeat about jumping back to its normal position.
As Roy Burns of Boston-based Private Equity firm TA Associates, whose firm owns Wealth Enhancement Group had said that they think the RIA space is just a terrific industry and for all of the reasons that it was two months ago, and for the same reasons it was two years before that or even five years before that. He further said in his talks with Forbes.com, “the tailwinds of independent advice and supporting clients through thick and thin really doesn’t change based on economic activity.” He said that it is a needed service and clients need advice – the best way to get that advice is through a fiduciary.
Another firm Hightower’s CEO Bob Oros – that has the financial backing of Boston-based private equity shop Thomas H. Lee Partners – revealed that his firm continued to do deals while working remotely. The company in April also announced its plans to buy tax and estate planning specialists – Wellspring Associates of Atlanta and other several acquisitions in its pipeline.
In a nutshell, despite the economic disruption caused by COVID-19, the private equity firms in the US – while expecting some amount of decline in deal activity – are positive that the decline would not exceed 25 percent.
Interestingly, most of the private equity firms in the US have not really felt the economic slowdown with most of the activities happening over video conferencing and other socially connecting software and apps.