Private Alternatives Strategies Responding to Market Irregularities
Fiera Capital’s portfolio managers have been diligently monitoring the outbreak of the COVID-19 virus and its ongoing impact on global financial markets. While the public markets have been in the spotlight due to the exceptional losses, private market investments are not unsusceptible to the major changes taking place, such as the fall in commodity prices and interest rates. That said, Fiera Capital’s Private Alternative teams manage their mandates with a long-term outlook, and as such, have built portfolios that are capable of withstanding temporary market dislocations. Strong covenants, trusted relationships, deep underwriting analysis, disciplined monitoring and thorough experience in their asset classes are the tools that our managers use to build strong portfolios.
In the short term, we can expect more volatility than we typically see in Private Alternatives, with a higher probability of impacts on reliable income streams and net asset valuations for our long-term investments and some delays in term of capital deployment. In the medium to long term, income streams and total returns in general should be relatively stable and back to normal, depending on the length of the current situation. Patience, monitoring, and not allowing panic to set in are the key elements. We are reassured that our investment teams are closely monitoring their investments, partners and borrowers to ensure that they have proper business continuity plans in place and contingencies to ensure operations continue, and will work intensively to assess any impact from the downturn or potential recession.
Our Private Alternatives managers detail how their portfolios are positioned to deal with the current market dynamics and what steps have been and are being taken to ensure they are well-capitalized and positioned to weather this economic storm.
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