The economic disruption caused by COVID-19 is the worst recession the world has seen in nearly a century. At the OurCrowd Pandemic Innovation Conference, Alec Ellison, Chairman of OurCrowd US, sat down with three world-class investors to discuss their perspective on the coronavirus recession, caused by the fallout of the COVID-19 pandemic. The three investors included founder and Chief Investment Officer of Key Square Group Scott Bessent; managing director at Insight Partners, Deven Parekh; and partner at Bessemer Venture Partners, Jeremy Levine.
Throughout the discussion, Bessent emphasized the importance of putting the present day into context and thinking about what the world and the economy may look like at intervals in the not-so-distant future, specifically in the medium term. Bessent drew attention to the Japanese economy surrounding the Fukushima attack in 2011. “For several years,” said Bessent, “the Japanese stock market was the best performing market. Japan as a travel and investment, private equity venue came back on everyone’s radar screen. But it’s hard to believe when you were watching Fukushima burn that this could happen 18 months later.” While Bessent noted that the uniqueness of the situation makes creating a road-map difficult, he seemed confident that in the not so distant future, the economy would bounce back.
Levine noted that the current “disconnection between the financial markets and the economy may be unprecedented.” In a few years, with the luxury of hindsight, Levine expects more clarity on what’s happening with the market during this economic crisis, but at the moment, “it’s very hard to have high confidence that you know what’s going on today, today.” This lack of clarity leads Levine to ask, “what strategy do you pursue as an investor when you are investing in this enormous amount of uncertainty?”
According to Parekh, however, many companies “have continued to grow at a pretty strong rate” throughout the economic lockdown and market instability. Insight Partners has closed with nine new investments since the pandemic erupted in mid-March. Parekh highlighted the role of software companies in keeping industry strong amidst the chaos. He suggested that the relative safety and long-term benefit of investing in software technology is “going to be a driving force” in reshaping stores and reengineering supply chains.
Watch the full 20-minute session, Investing in a Time of Crisis, for what these successful venture, private equity, and macro investors have to say about investing in such uncertain times.
Replay all the sessions from the OurCrowd Pandemic Innovation Conference here.