There is little doubt that private investors face a more challenging financial climate than at any time in a generation.
As financial reforms gather pace attention is focusing on the impact that this is likely to have on the financial services industry, on private equity investors and on the wallets of professionals.
Will there be appetite for more initial public offerings in 2011, thereby providing an exit for some companies' investors - this remains unclear. What is clear is that uncertainty will remain a feature of the landscape for some time to come.
Eric Mindich, Founder and Chief Executive Officer, Eton Park Capital Management, USA; Co-Chair of the Governors Meeting for Investors 2010, said at the World Economic Forum's Annual Meeting in Davos-Klosters in 2010 that leading private equity fund managers and hedge fund managers recognise that they are operating in a world where the relationship between their industry and various stakeholders was changing.
"The perception was changing, in some cases very rapidly. It’s against a backdrop where financial markets themselves are coming under question as to whether they’re the best allocator of resources and, therefore, participants within those financial markets are also facing a similar set of questions", he said, adding that there was a recognition that perhaps the industry had not communicated as well as it could with its various stakeholders and with the public, in order to in some ways articulate better what it is it does, what its role is and how it participated throughout the last several years.
Mr Mindich said that in the private equity world there was a feeling that private equity firms had contributed significantly to growth capital and to efficiencies within corporations. "Within the hedge fund world, there is a feeling that, generally speaking, in addition to hedge funds not having been central to the financial crisis, there was also the view that largely they had fulfilled their mission to investors in terms of delivering absolute returns, and that their investorsthemselves were pension funds, foundations, endowments, all sorts of types of investors like that."