Private Equity Wire news update - 'A contested US election outcome is not new to history'

'A contested US election outcome is not new to history'

Both presidential candidates in the US election still have a path to 270 electoral college votes. And although we still don’t know who the next president will be, the Democrats have set up a transition website, while the Chinese yuan rose on the prospects of a Blue win.
Based on the fact that a Joe Biden-led White House would likely lead to less strained US-China relations, the yuan-dollar exchange rate ended on a 28-month-high yesterday.
It is also widely accepted that a Biden victory would impact M&A and private equity deals as he intends to introduce higher corporate tax, new regulation and increased antitrust measures. More on this in coming weeks.
PEWire published a podcast with Mike Bego, founder and managing partner of US-based secondary private equity firm Kline Hill Partners. The interview centres around the current rise in credit defaults in the US as well as globally, key takeaways from 2020, some red flags in the current climate, and the fact that a contested outcome in the US election – which looks like a probable scenario at this stage – is nothing new.
Meanwhile, investors continue to monitor any updates on the US election outcome to determine how it could impact global markets. Emerging market players in particular might benefit from a Democratic US government.
“We view a Biden Presidency as supportive for EMs asset class, as it’s likely the US will seek a more multilateral approach, which will see continued monetary and technical support to EM countries from global institutions such as the IMF and World Bank as they deal with the aftermath of the Covid-19 shock,” commented Polina Kurdyavko, head of emerging market debt at BlueBay Asset Management.
She added that a multilateral approach could also translate into less open conflict and trade uncertainty with respect to China. “This global backdrop should support a benign inflationary environment – with the lack of a very large fiscal package in the US, we also see oil prices remaining somewhat stable, anchoring headline inflation trends, with core trends globally still under downside pressure,” Kurdyavko said.
In other news, KKR invested about USD 6.2 billion in markets across private equity, infrastructure and real estate in the third quarter, a figure which exceeded its previous peak of USD 5.5 billion in the second quarter as the firm takes advantage of pandemic-related turmoil.
PEWire also published a series called ‘Shariah in the spotlight’ this week, where we look at the relationship between ESG, Shariah practices and private equity investments.

Karin Wasteson
Editor, Private Equity Wire

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