Financial Times on LinkedIn: Dealmaking slowdown leaves private equity with record unsold assets (2024)

“Private equity groups globally are sitting on a record 28,000 unsold companies worth more than $3tn, as a sharp slowdown in dealmaking creates a crunch for investors looking to sell assets. [ ] Last year, the combined value of companies that the industry sold privately or on public markets fell 44 per cent on 2022 to its lowest level in a decade. [ ] This has prompted the industry to use alternative money-raising tactics, including so-called net asset value financing — loans secured against typically highly indebted portfolio companies — and transferring companies to new internal funds. This can allow in new investors while others exit. [ ] The “secondaries” market — of private equity investors buying and selling existing stakes in funds and private equity groups moving assets from older to new funds — was another bright spot. The amount of money raised in the secondaries market nearly doubled last year, with groups including Blackstone and Lexington Partners both raising more than $20bn each.”

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Unpacking the Realities of Private Equity: A Comprehensive 6000-Word Case Study

Pretty astonishing. Due to the recent slowdown in the M&A market, private equity groups globally are now sitting on a massive 28.000 unsold companies worth more than $3tn. Lots of sell side mandates waiting for assets that may be hard to sell in this current market...

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When dealmaking slows down, private equity firms and other investors become more cautious with their investments, leading to a few potential implications for low to mid-market companies:1. **Lower Valuations**: 2. **Longer Time to Exit**: 3. **Alternative Exit Strategies**: 4. **Increased Importance of Performance**: 5. **Focus on Value Creation**: Each company's situation will be unique, and the impact of a dealmaking slowdown will vary based on the industry, the company's financial health, and its strategic position. Companies looking to exit in such an environment should work closely with business advisors to carefully plan their exit strategy and navigate the challenges of a slow dealmaking market.#businessstrategy #businessexit #businessadvisory

https://lnkd.in/e_6SEDPa Family Offices are making waves in the world of Private Equity. The are representing a larger share of LP interests. At the same time they are competing with Middle Market PE firms for investments in operating businesses. The attached article addresses the first trend - we recommend you read it!

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Going back to the fundamentals.“When private equity started out, it was about really good deal sourcing and then doing a lot of operational things to improve companies.” - Marc NachmannIt'll be difficult relying so heavily on leverage and multiple expansion to generate returns going forward.#privateequity #scalingup #buildingbusiness #fundamentals

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Private equity (PE) firms thrive on their ability to acquire and build great businesses even in challenging times. They are skilled at creating rapid value and adapting their plans as circ*mstances change. They have always had a differentiated approach that gives them an edge, and their interventionist nature is key to getting returns in a competitive market.

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Private equity can be an attractive option for those seeking expansion or an exit strategy.Read the full article: The Risks and Rewards of Private Equity▸ https://lttr.ai/ARzQG#FamilyBusiness #SuccessionPlanning #BusinessOwner #SeamlessTransition #PrivateEquity #FamilyDynamics #PersonalFinancialPlanning #ExpertGuidance

I guess I am "on record" saying that 2H of 2024 could be particularly busy for new M&A. We're already seeing the signs of growing pressure to sell assets, but primarily in the form of corporate carveouts and family / founder owned businesses. I expect to see increased private equity selling activity over the next 3-6 months.#privateequity #privatecredithttps://lnkd.in/eppZP-Ad

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