Barings CEO Mike Freno discusses private markets deals

With the surge in private markets M&A activity, industry leaders are cautioning everyone to approach these transactions with a clear understanding of the risks involved. Barings chief executive Mike Freno stresses the importance of going into these deals with eyes wide open.

Private markets M&A refers to mergers and acquisitions involving companies that are not publicly traded on stock exchanges. These transactions have been on the rise in recent years, driven by factors such as low interest rates, abundant capital, and the search for higher returns in a low-yield environment.

Investors are increasingly turning to private markets in search of better opportunities for growth and higher returns. However, as Freno points out, there are risks associated with private markets transactions that should not be overlooked. These risks include illiquidity, lack of transparency, and potential for conflicts of interest.

Despite the potential pitfalls, private markets M&A can offer attractive opportunities for investors looking to diversify their portfolios and access alternative sources of return. These transactions can provide exposure to a wide range of industries and asset classes that may not be readily available in public markets.

One key advantage of private markets M&A is the ability to take a long-term view on investments, rather than being subject to the short-term fluctuations of public markets. This long-term perspective can be advantageous for investors looking to build sustainable value over time.

However, it is essential for investors to conduct thorough due diligence and seek expert advice when considering private markets transactions. Freno emphasizes the importance of working with experienced advisors who can help navigate the complexities of these deals and identify potential risks.

As private markets M&A continues to gain momentum, it is crucial for investors to educate themselves about the unique characteristics of these transactions. Understanding the risks and challenges associated with private markets can help investors make informed decisions and mitigate potential pitfalls.

In conclusion, while private markets M&A offers exciting opportunities for investors, it is essential to approach these transactions with caution and a thorough understanding of the risks involved. By going in with eyes wide open and seeking expert advice, investors can navigate the complexities of private markets and access the potential benefits that these transactions offer.