Diversification key to mitigating downturn, say AVCJ panellists

As concerns about a looming recession abound, Coller Capital's Peter Kim asked a panel of industry participants what are they doing to mitigate a downturn, during a session about global private markets that he was chairing during the event.

"We opt for diversification of assets across segments and regions," said Ivan Vercoutere, managing partner and chief investment officer at LGT Capital Partners. He added that the private equity market has grown significantly in the past 15 years, offering investors a number of ways to participate in the market, including small buyouts and special situation opportunities.

"Diversification is important, but also discipline," said Angela Rodell, CEO at Alaska Permanent Fund Corporation. She highlighted the importance of GPs being disciplined regarding the mandate that they have agreed with the Alaska-based sovereign wealth fund.

In terms of geographical diversification, Vercoutere said there are good opportunities across all regions, but the markets tend to be different. The US is a competitive, mature market that has one framework, while Europe is a complex market with a number of specific frameworks and countries. He cited that Benelux is a good market for small buyouts, citing that LGT has been the sole LP in a spinout that ultimately generated high returns upon exit.

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• United Kingdom