Coronavirus effect weighs on private equity

Author: Jimmie Franklin | Published: 11 May 2020

The impact of Covid-19 has begun to weigh on private equity as the buyside and the sellside adapt to their new surroundings.

In part, this has meant that deal terms and conditions are changing. There is a case for new covenants to be used when signing deals and making acquisitions – considering the new risks that they carry.

"Many new private equity deals have gone on hold or haven’t started yet. On the buyside, people are hesitant, and don’t want to go to their investment committees," said Clifford Chance partner Anselm Raddatz. "People don’t know how to price. Firms are waiting for stability and until they know how this will pan out for different industries. On the sellside it’s still relatively calm – though they could be waiting for a couple of months."

Concerns have revolved around how new deals will be undertaken as well as how to...