Private equity 2020: Citi’s Bailin expects bumper deal flow and HNW allocations to rise


Citi Private Bank’s Chief Investment Officer, David Bailin, says he is seeing high-net-worth clients allocating 20 per cent of their portfolios into the private market, with half of their private commitments increasingly earmarked for private equity.

The CIO expects 2020 to be a very active M&A year for private equity given that the stars are aligned in the alternative asset class’ favour: low-interest rates, attractive deals to be had in the global healthcare and tech scenes, in addition to lower-priced public market targets ripe for leveraged buy-out opportunities.

And on the topic of LBOs, will private equity fund managers be put off by the uncertainty posed on US healthcare in the current Elizabeth Warren Presidential campaign?

Bailin says healthcare is no longer solely driven by the US, suggesting investment opportunities in the sector are global in nature now and no longer hinge on a US market or political agenda.

While private equity investors can claim illiquidity premiums and the handy opacity of scrutiny in getting deals done off the public markets, fellow CNBC commentator – Jason Trennert, Chairman of Strategas Research Partners – is not as optimistic about single investors putting too much into private equity.

The cash pile is overflowing and private equity investors could feel the pressure to invest in high price tag deals to get that capital committed in 2020. Trennert also sees an active 2020 for financial investors, however, expects strategic investors to take things slower.

To watch the discussion in full log onto CNBC’s link here.