Alternative Investment Opportunities Through a Slowing Economy

The stateof the alternativesmarket Private capital markets have not been immune to the volatilityand pressures experienced in capital markets. Themacroeconomic climate continues to cast a shadow over alternatives across fundraising, exits and dealmaking. However,many alternative asset managers are positioned to step into potential opportunitieswheremarket stress has created imbalances and securitieshave been mispricedor competing sourcesof capital are sidelinedby market dynamics. A key factor to consider in the current environment is the significant decline in exit activity. Exit values declined for the thirdconsecutive quarter in the first quarter of 2023. US private equityexit value was down 63%year over year in 2022 and Q1 2023exits were downa further 34% from the same period in2022. Initial public offering (“IPO”) markets continue to be effectivelyclosed, withonly four US private equity-backed IPOs in the first quarter of 2023, versus an average of 17 IPOs per quarter for 2016 through2021. The only private equityexit path that remained truly active, albeit at significantly reduced levels, was exits to corporate buyers, representing 70%of all exits in the first quarter of 2023 ( FIGURE 4 ). FIGURE 4 : US Pr ivate Equity Exits by Type 0 100 200 300 400 500 600 700 800 900 1000 2015 2016 2017 2018 2019 2020 2021 2022 2023 $ billion Corporate Acquisition Public Listing Sponsor Acquisition Source: Pitchbook as ofMarch 31, 2023. Past performance is no guarantee of future results. Real results may vary. OVERVIEW | WEALTHOUTLOOK 2023 | MID-YEAR EDITION │ ALTERNATIVE INVESTMENTS | 7