Private equity investments appear to be weathering the impact of COVID-19 across multiple sectors and geographies, according to the results of a study by Willis Towers Watson, indicating that despite a subdued environment for exit deals in the first six months of the year, there has been little evidence of forced exits.
The survey, which took place in April across 36 private equity funds, representing 300+ portfolio companies, was designed to better understand how businesses were coping as a result of the pandemic, as well as setting out expectations for the coming months.
The results revealed that the significant turmoil in capital markets had little effect on the capital structures of portfolio companies, with 87% of respondents indicating that their holdings were unlikely to breach covenants as a result. Only 13% said holdings were either close, or likely to, breach covenants in the next 2 – 3 months.
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