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Laxman Pai, Opalesque Asia:

Take-private deals take center stage amid continued macro volatility as the public markets are shrinking, said a study. According to the latest private equity report from Ernst & Young, private equity firms are taking public companies private at a frantic pace.

Total PE deal value reached $92 billion in the first quarter of 2023, significantly down from the $240 billion closed during the same period last year, according to EY. Of the $92 billion in transactions, about $75 billion represented take-private deals.

Activity picked up as the quarter progressed, however, driven by large-scale take privates - March saw more than US$62b in PE deals announced, versus just US$12b in January.

Firms have more capital at their disposal - more than $1.2t in dry powder - and moreover, have diversified in ways that increase their resilience and flexibility, such as adding new asset classes.

"Macro headwinds continue to be top of mind for PE and make the operating and deployment environment challenging for PE firms, with instability in the banking system providing an additional headwind, insofar as it pulls immediate concerns around risk management to the forefront while pulling focus from longer-term value creation opportunities and opportunistic investments," said the study.

Because public market valuations adjust (both higher and lower) more quickly than in the private markets, PE firms continue to seek to take advantage of red......................

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