PRINT THIS PAGE Perspectives - Capital Dynamics quarterly newsletter April 200830/04/2008. Source: Capital Dynamics. 
Within the bulletin, the international private equity asset manager offers its take on why pension funds should continue to invest in private equity despite the recent market turmoil. An easy-to-use graphical illustration of the market climate for the different regions and sectors can be found on page 3, followed by key market figures. Why should pension funds continue to invest in private equity?
- The debt market correction is more prolonged than originally anticipated, however, the LBO segment still holds opportunity
- Private equity outperformed public markets even in down cycles
- For pension funds with a long term investment horizon and adequate diversification, the impact of the current market condition should be limited.
Over the past 6 months, the contagion of the subprime market has burst the debt bubble, resulting in widening spreads and tighter liquidity. As a result, deal volumes have dropped from a record high of USD 410 billion in Q2, 2007 to USD 140 billion in Q3 and USD 17 billion in Q4 (the drop is sharper in the US than in the EU). Despite some return of liquidity in October, the amount of hung debt is still estimated to be in excess of USD 200 billion.
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Capital Dynamics is a world-leading, independent asset manager exclusively focused on private equity. Capital Dynamics offers institutional investors and family offices a wide range of private equity products and services: traditional fund of funds, selected co-investments opportunities of leading private equity houses, consulting and asset management mandates as well as structured products. With nearly 20 years of experience Capital Dynamics oversees over USD 20 billion of client capital committed to the funds of leading private equity managers. Headquartered in Switzerland and with offices in New York, San Francisco, London, Birmingham and Hong Kong, Capital Dynamics is active in all major financial markets. Its client list includes some of the worldwide biggest insurance companies and pension funds. www.capdyn.com
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