Here’s the good news: Private equity firms are likely to sail through the COVID-19 pandemic more or less unscathed.
Private-equity firms can escape the more immediate consequences of the virus-driven recession, he expects, because they don’t have to mark their assets to market on a daily or even monthly basis, and because many are flush from a strong performance in recent years.
Here’s the bad news: Your bonus check will not.
Private-equity firms and the rest of Wall Street could see a 30% to 40% drop in bonuses as the coronavirus bites into everything from asset values to deal flow… “The virus is heading us toward a nasty recession,” said Alan Johnson, managing director of Johnson Associates in New York. His firm predicted banks, brokers and asset managers would slash bonuses this year, following a mixed performance in 2019, when private-equity firms held bonuses level or raised them as much as 5% over 2018.