Question Of The Week RESULTS: Volatility Makes Fundraising Harder

And the public has spoken. Er, the private. You guys. The problem with stock market volatility is that it makes private equity fundraising harder, according to 60% of peHUB readers who responded to our Question Of The Week, making that by far your greatest concern about today’s tumultuous markets (click on the chart to enlarge it).

And yes, this was another tumultuous day for the Dow, up 109 points in the morning, down 72 points in the afternoon, up near the peak late but closing 20 points below Thursday’s close at 11,108.

But for the most part, peHub readers shrugged off the effect of public markets on the lending scene. Just 15 percent voiced concern about widened credit spreads, and 12 percent said it’s beneficial. Remaining responses were in single digits.

We had one write-in. A reader said, “It makes the IPO market less attractive.”

It did make me wonder to what extent LPs may have become gunshy as a result of the financial crisis three years ago, when plummeting stock values knocked asset allocations all out of whack and when capital calls (to the extent there were any) only forced them to realize public-market losses. Hmm. A question for another day, perhaps.

Steve Bills is a senior editor at Buyouts Magazine. Any opinions expressed here are entirely his own. Follow him on Twitter @Steve_Bills. Follow Buyouts tweets @Buyouts. For information on how to subscribe, contact Greg Winterton at greg.winterton@thomsonreuters.com.