Alternative Investment Opportunities Through a Slowing Economy

This canbe seen in the fact that US private equitydeal volume inQ1 2023 was up 11.4% fromQ4 2022 with approximately $261.4 billion. Overall, this represents a downward trend from the peaks of 2021, but is still well above the pre-COVID average of $180.3 billionperquarter. The cost and limitedavailability of credit capital means thatmanagers must finance deals more conservatively with lower leverage and have high confidence in their ability to drive improved financial performance at the company level. With these changes, valuations are comingdown to reflect the new reality. For example, themedian enterprise value to revenue multiple for the quarter endingMarch 31, 2023was 1.7x for buyout deals in NorthAmerica and Europe. This is down32%, from a peak of 2.5x in 2021. 5 FIGURE 6 : Nor th America and Europe Private Equity EV/Revenue Mult iples Declined in Q1 2023 1.2x 1.2x 1.4x 1.5x 1.5x 1.5x 1.7x 1.7x 2.0x 1.8x 2.5x 2.4x 1.7x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 EV/Revenue Source: Pitchbook as of March 31, 2023. Past performance is no guarantee of future results. Real results may vary. Hedge fundssaw an uptick innet capital flows in the first quarter of 2023 as macroeconomic and financial risks and volatility increased significantlyon the backof regional bank failures and other dislocations. Despite this, hedge fundswere able to deliver positive performance. TheHFRI Fund WeightedComposite Index gained 1.2% in the first quarter, ledby both equityhedge and event-driven strategies. Investors allocatedan estimated$9.1 billion innewcapital to the hedge fund industry in the first quarter and hedge funds saw performance gains to bring total global hedge fundcapital to $3.88 trillion. Investors allocatednewcapital to hedge funds in Q1 to opportunisticallytake advantage of the currentmarket volatility whilemanaging downside risk. From a strategy perspective, macro and relative value, includingmulti-strategy funds, remained in focus, while equityhedge strategies also saw notable net asset inflowsafter being out of favor in2022 amid declines in the broader equitymarkets. 6 5 Pitchbook, as of March 31, 2023 6 HFR, as of March 31, 2023 Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. Past performance is no guarantee of future results. Real results may vary. OVERVIEW | WEALTHOUTLOOK 2023 | MID-YEAR EDITION │ ALTERNATIVE INVESTMENTS | 9