Cover Feature Exposes Hidden Risks Facing InvestorsMALIBU, CA – Spurred by a steadily improving economy, the private equity sector is poised for a rebound this year that could once again see investors reaping double-digit returns, according to the cover story in the April issue of Worth magazine.
Scheduled to hit newsstands on March 23, Worth offers a comprehensive look at all aspects of private equity, which, as detailed in a series of articles, has been gaining momentum since the third quarter of 2003.
“The financial turbulence of the past two years has given way to a surge in economic growth and consumer confidence, generating momentum in the M&A and IPO markets,” explained Editor-in-Chief Dwight Cass. “Accordingly, this has manifested itself in renewed interest in private equity investments.”
Presented in four feature articles, Worth’s focus on private equity chronicles the sector’s recent history, from its unprecedented success during the dotcom boom, to its subsequent nadir after the crash, and, ultimately, to its nascent recovery today. Most importantly, it details the lessons investors learned over the course of this cycle and how these insights will affect the market as it claws its way back.
Worth editors and contributing writers point to three significant trends as factors for this perceived optimism:
· The economic rebound, like all recoveries, has caused small companies’ intrinsic values and prospects to outrun their ability to raise capital. As a result, venture capital funds are able to invest in sound companies for less than they are worth.
· The markets for small-company M&As and IPOs are hitting their strides; neither has succumbed to bubble-market valuations, resulting in deals continuing to flow in the pipeline. Although volume of venture-backed IPOs is not expected to match that realized during the dotcom boom, enough business is being done to provide much-needed liquidity to venture firms and their investors.
· Both individual and institutional interest in private equity is on the rise, according to fund managers.
While these conditions have set the stage for a renewed optimism in the private equity sector, Worth editors caution that investors pay close attention to hidden risks. “The private equity funds that attempt to raise money now will find that, in the aftermath of the Internet mania, a more sober and critical audience awaits them,” explains Mr. Cass. “Many of us have re-embraced the less-glamorous but crucial portfolio-construction, asset-allocation and risk-analysis details that we allowed to fall by the wayside in the 1990s, to our eventual chagrin.”
Mr. Cass notes that today’s investor also wants to see fund managers spending less time raising mega-funds and more time managing investments.
A monthly wealth management publication for the nation’s most affluent households, Worth premiered in December 2003 as a comprehensive resource for individuals and families with an average net worth of at least $5 million and a minimum average annual household income of $1 million. Combining the financial acumen of Worth with the luxury lifestyle expertise of 28-year-old Robb Report, Worth covers the philanthropic, family finance, business and lifestyle issues confronting individuals whose focus has shifted from obtaining wealth to the challenges of managing it.
CurtCo Media
CurtCo Media is operated by CurtCo Media Labs, which for more than two decades has built highly successful publishing companies. CurtCo has launched or acquired 28 magazines during this period. In association with Weston Presidio and TD Capital Communications Partners, CurtCo operates Robb Report, The Robb Report Collection, Robb Report Home Entertainment & Design, Worth, Robb Report Motorcycling and CurtCo’s Digital TV. The company maintains offices in Malibu, New York City and Boston.
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