How can private equity investors ensure capital is put to work through the Covid-19 crisis?

Covid-19 has brought economies around the world to a standstill, and private equity deals have not been immune to the market slowdown. Global mergers and acquisitions (M&A) and private equity (PE) deal volumes have declined meaningfully in 2020, forcing investors to evaluate how to best allocate capital in an unprecedented market environment.

Consistent deployment of capital in private equity portfolios across market cycles is important, and a contributing factor in its strong long-term performance. Private equity often thrives in times of disruption, as it has the flexibility to take advantage of complex situations. Some of the best private equity vintages followed the global financial crisis (GFC) in 2008/2009, during which private equity funds deployed capital over the course of a cycle at relatively lower valuations.

If traditional private equity opportunities do not materialize in the near-term, what options do limited partners (LPs) have in putting capital to work?