Not-for-profit healthcare systems saw solid returns in the 9 months ended September 2021. Performance could largely be attributed to strong US equity returns, with the S&P 500 returning 15.9% for the period.
Source: Goldman Sachs Asset Management and company filings. As of September 30, 2021. Data as of indicated quarter end. Past performance does not guarantee future results, which may vary.
Appetite for Alternatives continues to grow, with investors looking to increase their allocations to growth equity, venture and buyout.
Q1 2022 M&A activity was softer relative to pre-pandemic levels, seeing smaller and fewer transactions.
Constrained global supply chains may increase healthcare costs, delay procedures, and lower productivity.
Several hospital systems nationwide have had to scale down, impacting hundreds of employees in the process.
Head of Not-For-Profit Healthcare, Multi-Asset Solutions Group, Goldman Sachs Asset Management
Two themes have driven market returns this year: inflation and Russia. Higher and more persistent inflation has caused interest rates to rise in realization that central banks will have to raise rates more quickly to combat high prices. The Russian invasion of Ukraine caused a broad sell-off in equities due to fears about the potentially wide-ranging impact of a war in Europe. At this point, we believe much of the negative news has been priced, and though risks have not disappeared, they have receded somewhat. We believe growth will moderate but remain above trend and are positioning portfolios to be neutral and taking down risk management trades that we previously had in our portfolios.
Private assets offer the potential for higher returns, which is particularly attractive as record-low interest rates and equity valuations mean that returns on traditional asset classes could be challenged in the coming years. In addition, we have seen a trend of companies staying private for longer, which requires investing in private assets if investors wish to participate in these companies’ growth. For investors with illiquidity tolerance, privates can be a key part of their portfolios.
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Date of first use: 5/4/2022. 277845-OTU-1603223