Financial markets are showing signs of normality after a turbulent 2020.
Covid-19 slowed activity for the private equity and real estate sectors, and in fact the whole alternative assets sector has been in something of a holding pattern. Both fundraising and investments dropped sharply in 2020 and the pandemic has toyed with asset prices worldwide. There are now signs that private equity and real estate managers are getting back on track, operating business as usual.
Preqin reports that deals in the industrials sector have increased. Good news for the alternative’s asset classes. Preqin also notes that institutional investors are back and active; they want to invest and they think now’s the time.
2020 shined a light on how essential it is for managers to have a diversified and international portfolio and now the world is moving again (albeit slowly at the moment), managers need to look at diversifying, to both reduce risk and increase reward.
A year on in real estate, the tourism industry continues to struggle, but the residential market is booming as a new flexible business culture sees staff taking less time at the office and more time at home. Private equity firms are re-evaluating options after pandemic-related market upheavals, but deal research is underway; there’s plenty of opportunity in businesses that are perfectly viable.
Managers looking to fully capitalise on investor interest should be searching worldwide – crossing borders is the only way to fully diversify. And, regions are slowly bouncing back, with more countries opening every day and their economies and infrastructure boosted thanks to pandemic-sped digitisation.
According to our recent study, cross-border real estate deals in 2021 are set to pick up again, with the US, Germany, United Kingdom and Singapore most likely to be the major players in cross-border activity. And, 73% of real estate investors expect to see an increase in the reallocation of capital to commercial sectors with safer cash-flows. For the private equity sector, the most attractive overseas markets for investments continue to be the established Western Geographies, with 92% of respondents planning to invest in Europe, 85% in the UK and 76% in North America.
But, as we know, crossing borders brings many headaches for CFOs. Our report highlighted that private equity firms are facing many complexities when investing across borders, with 65% finding regulatory frameworks a challenge, followed closely by dealing with differing tax regimes (63%). For real estate, respondents identified increased competition for assets (80%) as the greatest complexity when engaging in cross-border investment activity, followed by regulatory frameworks (63%), political stability (50%) and then tax regimes (47%). With these obstacles changing from country to country, juggling them all can be time-consuming, distracting you from focusing on more value-add, essential tasks, like producing useful and measurable financial data for your stakeholders.
This is where Auxadi can make your life easier.
Trusted by some of the world’s biggest fund managers, we can help setup the right type of entity for your international investment. Our local knowledge and expertise with SPVs will prove invaluable.
We’re extremely knowledgeable of the countries our clients operate in, understanding all the local regulatory, legal and tax regimes and requirements. Your CFO and HR team won’t be struggling to learn new systems as we’ll take care of it for you. Not to mention our local staff can help you navigate cultural differences in new regions.
Our unique MultiCountry IT platform is purpose-built to provide easily consolidated accounting and tax data. We know, because we built it. With over 40 years’ experience and our Gold Partnership with Microsoft, we’ve designed and created a cloud-based accounting system that lets you access the accounts from all your international entities in formats (and currencies) that best suits your needs. And, we’ll provide you with the strategic analytical data you need to grow your portfolio further.
We have offices in 22 countries throughout Europe and the Americas, and we service clients in over 50 countries through our wide affiliate network of partners.
Get in touch to find out how we can make your life easier.
Local Knowledge – International Coverage
Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.