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In turn, stock markets showed decreased appetite for IPOs leading to challenges with a traditional investment exitstrategy for private equity fund investments, a drop in asset valuations and a subsequent slowdown in fundraising due to liquidity challenges. In 2024, we foresee this trend to continue.
That’s why PIPE deals are common in distressed or struggling companies, small caps, and markets with low liquidity, such as during the 2008 GFC and the pandemic crash of 2020. PIPEs also simplify the exitstrategy for private equity investors. They were also frequently used in SPACs to take advantage of retail mania.
Back in the 2008 recession, Whole Foods stock dropped 90% and we were trading at three times our operating cash flow. 2008 is one of them that comes up, but in the early days you also have the flood in Austin at your first location. Once we did our IPO, then we were a platform and also an exitstrategy for the other entrepreneurs.
We offer a full range of transaction and advisory services, guiding our clients through sell-side transactions and exitstrategy planning, growth through acquisition, debt restructuring and corporate recapitalization.” In 2008 Bentley professionals worked with over 50 clients.
Then as you get to retirement, that becomes more in cash out of the stock market as you need to prepare for living expenses in the event that the stock market has a 2008 style crash, your first year of retirement, and you need that money for your life. Jules van Binsbergen: Well, so yes, that's fine that you make that argument.
If they could, oil would not have reached $147 in 2008—a level is has never subsequently reached and the examples I referred to earlier—involving the Nikkei and Nasdaq—wouldn’t have occurred. Our strategy is to try to keep exposures to any asset class or market segment at a size that won’t lead to regret if something goes wrong.
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