On April 16, FundFire published comments by Jayne Juvan in “Low Profile: Private Equity Players Avoid Fray on Tariffs Volatility.” The article explores the approach that private equity firms are taking in light of President Donald Trump’s new or proposed tariffs on their portfolios.

Jayne remarked that large, sophisticated private equity firms tend to invest with a long-term view and see this volatility as a “passing phenomenon.”

“There is some consensus that we’re seeing volatility with this today, but that things will probably settle out in the next six to nine months, and the administration will find its footing on tariffs,” she said.

Jayne commented that the volatility may have near-term impact on current deals, such as foreign buyers pulling out of deals, purchase prices being renegotiated, and an overall slowing of M&A activity. That said, many firms still hope the situation will mirror the 2020 COVID-19 market disruption. The pandemic caused deal flow to completely freeze for weeks, but eventually it rallied, and Jayne believes a similar rebound in the second half of the year is likely to occur.

In the meantime, she recommended that managers avoid reacting too strongly to the current spectacle in the short term.  “I think that there is reason to believe that this is short lived,” she said.

The article is available to FundFire subscribers on its website here.