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Laxman Pai, Opalesque Asia: The global private equity deal value plunged by 37% to $438 billion in 2023 from $699 billion in the prior year, while exit value dropped by 44% to $345 billion from $613 billion over that time period, said a study.
According to Bain & Co.'s "Global Private Equity Report 2024", 38% fewer buyout funds closed - declining to 449 in 2023 from 722 in 2022.
Buyout investment value dropped by 37% year-on-year last year alone to $438 billion, the worst total since 2016, and was left 60% down compared with 2021's peak. Against 2021 highs, deal count was down 35% and exits value were down by two-thirds (66%).
Bain Capital report said this was largely due to the sharp and rapid increase in central bank rates which caused the market to stall. However, it pointed out that in a year "of haves and have-nots" dollar commitments in buyouts surged as several high-performing funds came to market.
With buyout funds alone sitting on record uncommitted funds of $1.2 trillion in dry powder, 26% of which is four or more years old, the anticipated revival will likely be stoked by the heavier-than-normal incentives for general partners (GPs) to resume dealmaking, Bain finds.
Exits are singled out by the report as the industry's most pressing issue, with exit markets having seized up, stanching return flows of capital to limited partners (LPs) while leaving GPs sitting on an aging $3.2 trillion of unsold assets, accounted for by some ...................... To view our full article Click here
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