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4 ways to better navigate global market volatility with PitchBook

Learn how Pitchbook product features help dealmakers navigate market volatility and optimize growth across the investment lifecycle.

Aggressive interest rate hikes, inflation, war, and a lingering pandemic, plus other economic uncertainties have all impacted the flow of capital—including the dealmaking environment, where investors are taking a measured approach and cautiously putting capital to work from funds raised in more favorable market conditions. In fact, PitchBook’s most recent quantitative model predicts a 65% chance that the US will enter a recession in the next 18 months. That would represent a huge shift from where the financial industry was just a few years ago, and professionals throughout the private market ecosystem are adjusting on the fly to a new macro environment.

As investors, companies and LPs are assessing their strategies and making pivots where necessary, it’s worth reiterating that PitchBook has the tools you need to adapt to today’s challenges and whatever else may lie ahead. We offer comprehensive, timely data, insights, and analysis, as well as customizable tools built to help you win. We are uniquely positioned to help your firm navigate global market volatility, refine investment and allocation strategies, and safeguard your bottom line.

In this article, we’ll explore some of PitchBook’s best-in-class features built to complement your team’s work and help you traverse a landscape that’s ever-evolving—and sometimes tumultuous.

Inform your strategies with access to deal and valuation multiples

Reliable deal and valuations data are non-negotiable when it comes to building strategies to withstand market fluctuations. PitchBook’s deal data spans the globe, including deal size, date, status, investors, pre- and post-money valuations, plus 100+ additional filters across nearly two million deals—and our counts are updated daily. Using the PitchBook Platform, your firm can efficiently evaluate deal histories, for example, to confirm a company’s past financing events or confirm whether a startup is revenue-generating after its most recent funding round. Drill further into the data, and you’ll even find add-ons, growth equity, and sponsor-to-sponsor transactions.

Digging into PitchBook’s valuations data, with platform access you can gain immediate insight into the flow of capital across the entire venture capital, private equity, M&A spaces, not to mention the public markets. Pulling together detailed company valuations routinely eats up analysts’ valuable time, especially if your firm uses legacy tools and data spread across different systems. To get more accurate data for financial models, get suggested peer sets comprised of public and private companies, see how financials are calculated, and build and analyze comps quickly, you need PitchBook.

Combining our robust private transaction data—including the world’s largest source of deal multiples and valuations—with public fundamentals and consensus estimates, we empower our clients to build more accurate comps with the transparency and speed required in today’s volatile market.

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PitchBook’s guide to overcoming four allocator workflow challenges

Learn how LPs can use data-driven insights to uplevel their investment strategies—with trusted research, benchmarks, and portfolio allocation tools.
 
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Monitor for meaningful shifts in the industries and spaces that matter most to you

Emerging spaces

VCs, corporate strategists, and professionals across the private markets can utilize PitchBook’s Emerging Spaces feature to discover disruptive, niche spaces on the rise—142 of them and counting—from 3D printed buildings to blockchain gaming and assistive tech. With Emerging Spaces, our clients can zero in on promising new investment trends, opportunities, and industries, even amid market turmoil. Especially important now, this feature gives PitchBook users access to actionable insights before broader awareness builds across their competitive set, paving the way for heads up decision-making.

Digging in a bit deeper, Emerging Spaces enables teams to key into changes as burgeoning industries rise, fall, and otherwise shift. With noteworthy insights surfaced front and center, PitchBook clients can assess an emerging space’s growth metrics (including deals, capital invested, and median deal size), as well as trending companies within an emerging space and its most active investors.

PitchBook platform emerging spaces

Market maps

Market maps are visual representations of a current market landscape, and they’re essential for a variety of teams looking to better track opportunities and threats in a shifting environment. Our Market Maps platform feature gives PitchBook clients access to a powerful segmentation and data visualization tool that they can rely on to track their competitors—established and new players alike, across a variety of industries and their sub-segments. Create custom market maps with a click of a button, plus add or remove companies if you’re mapping a nuanced space the defies traditional industry taxonomies. Instantly formatted with company logos and compelling data points, our market maps are always presentation-ready and can be refreshed with new data via a simple re-download of a saved map.

PitchBook's market map feature

Market size estimates

PitchBook offers 883,000+ market size estimates spanning 30+ markets—and our data team adds hundreds more every day. Fueled by our dynamic research process, the feature provides financial industry pros navigating volatile markets with data they can use to make sense of a specific industry’s landscape, understand the revenue of a potential market, validate their hypotheses about a particular market, and/or create long-term strategic plans. This toolset blows basic search engine results and other third-party providers out of the water. Additionally, you can leverage PitchBook’s market size estimates functionality to curate lists based on geography, source, estimate year, and publish date, and even to discover adjacent markets.

Uncover and act on timely research covering market uncertainty

Unmatched research and analysis across private market asset classes

An unrivaled resource, our private market research spans asset classes, puts investors first, and publishes at the rapid pace required to keep our customers aware of industry shifts. PitchBook’s Institutional Research Group (PIRG)—the dedicated team of experts developing this research—covers VC, PE, M&A, and emerging technologies (which we cover later in this section).

Their coverage became even more essential for capital market pros amid the global market volatility, which kicked off at the onset of the COVID-19 pandemic and persists through present day. Addressing specific market conditions, recent reports examines what it means when dry powder stays dry and what the future holds for private capital, for example. All the PIRG team’s coverage is available via PitchBook’s in-platform Research Center, a hub that houses hundreds of thousands of PitchBook and Morningstar reports.

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The Biotech Company Lifecycle

PitchBook institutional research on global market volatility
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Emerging Tech Research and analyst-curated verticals

Taking the speed of innovation and how quickly landscapes can shift into account, monitoring for changes across the industries and verticals is vital to navigating volatile markets. As technologies, companies, and offerings become increasingly nuanced and competitive, it’s crucial for pros in the financial space to have access to expert analysis on industries and verticals on the rise.

Developed by our PIRG team, PitchBook’s Emerging Tech reports help our customers better segment and size markets, understand company and investor landscapes, evaluate opportunities, and develop conviction around the growth prospects of emerging industries. Comprised of quarterly and annual coverage, as well as one-off analyst notes, our Emerging Tech Research reports equip teams with the tools they need to traverse the opaque markets their firms operate within—or want to operate within.

Also available via our comprehensive Research Center, PitchBook’s Emerging Tech Research reports provide original, comprehensive coverage of 14 disruptive emerging tech sectors, including:

  • Agtech
  • Artificial intelligence and machine learning
  • Carbon and emissions tech
  • Clean energy tech
  • Enterprise healthtech
  • Fintech
  • Foodtech
  • Healthcare services
  • Information security
  • Insurtech
  • Internet of things
  • Mobility
  • Retail healthtech
  • Supply chain tech

One-on-one access to PitchBook analysts

As part of their subscription, PitchBook clients have direct access to our industry-leading analysts. Capital market pros can leverage the platform and our published research to explore the data and insights most relevant to their teams’ work. With that knowledge in-hand, they can then chat with someone from our deep bench of seasoned experts to dive further into the nitty-gritty details—a level of capital market clarity not available anywhere else.

Identify who’s performing, or outperforming, in today’s volatile market environment

The PitchBook Benchmarks report and custom benchmarks feature

General partners (GPs) need a direct line to current performance data and insights to validate their investment strategies, while limited partners (LPs) rely on similar data to help inform their allocation strategies—during times of relative market ease and tumult. Staying up to date on fund performance and trends serves both of those aims.

Developed by our PIRG team, our quarterly PitchBook Benchmarks report aggregates strategic fund performance across a variety of metrics and vintages. Clients have access to thousands of underlying funds that make up the report’s dataset, too. From pooled IRRs to public market equivalents (PMEs), this report gives our customers the data they need to evaluate the performance of both funds and strategies.

report
PitchBook Benchmarks (as of Q2 2022)

Download the report

Investment style summary

PitchBook’s investment style summary feature, available in-platform at the top of all qualifying investor profiles, helps LPs critically assess specific fund managers and whether there’s potential alignment—or not. The feature gives PitchBook clients access to a high-level summary of a fund manager’s investment style and historical preferences across four notable categories, including deal size, deal type, geography, and industry. When evaluating a fund manager in today’s shifting environment, LP teams need to be confident that they’re making the right call—a call based on rock-solid insights. With our investment style summary tool, you can evaluate fund managers based on questions like:

  • What is a fund manager’s overall investment philosophy?
  • Is this fund manager a generalist or specialist in terms of the industries they invest in?
  • Is this fund manager focused on regional or global investments?
  • Does this fund manager typically focus on large, medium, or small investments?
  • Does this fund manager’s investment history align with how they’re positioning a new fund?

Portfolio Forecasting

LPs face incalculable barriers when it comes to making effective private market allocations. In Q4 2022, PitchBook launched a new feature to help address that—Portfolio Forecasting. An tool designed to anticipate and model portfolio and commitment pacing data, our Portfolio Forecasting tool uses a top-down approach to cash flow forecasting models and commitment pacing. The goal? To arm our clients with the information they need to make strategy-informed decisions on deploying capital through fund commitments.

Simply put, Portfolio Forecasting streamlines the cash flow forecast modeling and commitment pacing process for limited partners and other allocators. Indeed, it paves the way for efficient cash flow management, more allocation targets hit, and more strategic liquidity events.

Market volatility FAQ

For more insights on the overarching concept of market volatility, we spoke with Quantitative Research Analyst Andrew Akers, who’s part of the PitchBook’s Institutional Research Group. His insights are represented in the feedback below.

What is market volatility?

In broad terms, market volatility refers to larger than normal changes in financial asset prices often associated with elevated uncertainty about the future. Many market participants also view volatility as a proxy for risk at both the asset class level and the market as a whole.

What causes market volatility?

The causes of market volatility can roughly be grouped into two categories: technical and fundamental. Technical causes are those unrelated to an asset’s fair value, including a lack of liquidity and forced selling by investors that immediately need cash to meet financial obligations. On the other hand, fundamental causes arise from market participants trying to price increased uncertainty about macroeconomic factors, such as growth, inflation, and interest rates.

How should I invest during a volatile market?

There is not a single playbook for investors to follow during a volatile market. For those with a medium- to long-term time horizon and a thoughtful strategic plan in place, the best course of action is often to avoid doing anything drastic as long as the behavior of their investments is in-line with prior expectations. However, since many fail to heed this advice, market volatility can create pricing dislocations that lead to opportunities savvy investors can exploit.

More on volatility in the market

Discover how US PE has navigated and adapted to economic headwinds
Download the 2022 Annual US PE Breakdown

Learn how the halted exit landscape recently spurred a decline in VC funding
Download the Q4 2022 PitchBook-NVCA Venture Monitor

Even startups with lots of runway probably can’t grow into those sky-high valuations
Read our article about how even startups that are growing healthily are likely headed for a down round

How bad was 2022 for VCs?
Read our article that explains why it depends where you look

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