Hauser Insurance is in the process of reviewing its 2022 growth and investment strategy. The company recently released a report on the trends likely to shape the private equity industry over the next five years. The report highlighted four key trends that will impact Hauser’s approach to investing in private equity funds.
The first trend is a shift toward smaller deals. In 2018, Hauser made nine investments in private equity firms, but only two of them were more significant than $500 million in terms of value. In contrast, between 2017 and 2016, Hauser Insurance made 25 investments in private equity firms, with an average size of $600 million. This is significant because it hints at how much smaller deals will be valued in the coming years.
Second, there is a shift from Europe to North America. Hauser has historically invested more in European companies. Still, it has not been immune from the changes that have taken place in Europe over the past few years, as political uncertainty has led many companies to move their headquarters to North America. Hauser Insurance recently invested in a firm with a head office in Canada.
There is an increase in the number of single-company deals. Over the past five years, Hauser Insurance has made 30 investments with just one company as its sole target. This is significant because it shows that private equity firms focus more on investing in single companies than they have in the past.
The private equity industry continues to grow and evolve as the world’s economy changes and evolves. As this occurs, so does how private equity firms invest and how they structure their deals. Over the next five years, these changes are likely to accelerate as firms continue to make new investments and deploy capital into smaller deals. Many of these changes will be influenced by the regulatory environment, specifically changes in tax laws and regulations.