Private Equity at a Crossroads: Trends, Valuations & What’s Next with Matt Wolf of Elliott Davis 4-29-25
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This is Scott Becker with the Becker Private Equity and Business Podcast. We're thrilled today to visit with one of our most listened to guests. We're joined by senior market analyst, valuation analyst, and brilliant person, Matt Wolf. Matt is at a firm called Elliott Davis, a terrific firm. He's going to tell us a little bit about Elliott Davis, and then he'll tell us what he sees with trends with M&A. Is it almost ready to bounce back? What's he expecting and what's he seeing? Matt, can you take a moment, tell us about yourself, tell us about Elliott Davis, and then let's talk about what you're seeing and what's going on.
Yeah, happy to, Scott, thanks. I guess quick background on myself, spent nearly 20 years in sort of the valuation, private equity deal space at Elliott Davis, which is a firm sort of based in the Southeast, serving clients nationally, again, very focused on middle market, deals, audit, tax, consulting, advisory, and heavily leaning into industry and technology-based approaches to solving our clients' problems. So exciting firm, exciting time to be an advisor to these, to middle market deals nationally, globally. And it's just been a wild ride the past few months or so, as I'm sure all your listeners can also attest to. And What I've been really looking at lately, Scott, is just some of the changes to allocation ideology from limited partners and other sort of institutional investors. We've seen a pullback from public equities into high-yield credits, into gold, of all things, as people try to navigate this sort of changing geopolitical, changing macroeconomic
regime, I guess, for lack of a better word, and more specific to private equity. We saw big news a few days, maybe a week ago now, of Yale selling up as much as $6 billion of its private equity holdings. We've seen this convergence in returns between, at least historically now, between private equity returns and public equity returns. And just thinking about what does that mean going forward, not only for institutional investors and limited partners allocation to private equity but what does that mean for the the actual sponsors and how to think about deals how to how to go for how to source deals execute deals what does that mean for hold periods as um you know the the sort of global financial system works through this regime change and and a lot of investors take a you know another look at private equity and talk about that because there's there's
multiple different types of investors in private equity there's obviously the big institutions such that you're talking about um like yale like the pension funds that have made private equity a core part of their portfolio over the years and then you've got sort of what i would call moderate to higher worth that high net worth individuals that increasingly over the last bunch of years made pe and vc part of their portfolios and For the institutions that are adults in the room, at least to an extent, they take the ups and downs with a grain of salt. I feel like some of the high net worth individuals finally felt like they arrived and can invest in PE and VC and felt like it was almost like a status symbol, like the richest of the rich by sports teams, the next richest by, you know, joint 10 golf clubs, the next richest that are often pretending to be rich by really fancy cars so people could see that they're doing well.
And then there's all cadre people that felt like, oh, my God, we made it. We've invested in private equity funds. We've been invited to the dance only to see that we felt like the dog who caught the car, the dog that was chasing the car and catches the car and thinks, oh, this isn't as great as I thought. So what's your sense of this? Where does this go from here? Is private equity going to remain this critically important asset class? Are we all in trouble on this? And what we all hope for, like the dog catching the car, is not as good a car as we want it to catch.
It's a trillion-dollar question. It's a great question. And I guess for additional context, at least the way that I think about it and the way a lot of observers think about it is private equity, the value proposition was, OK, invest in my fund. Your money will be locked up. but you'll get a rate of return higher than market index, pick an index, right?
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