AC Lion Digital Executive Search’s Post

Private equity firms showed remarkable adaptability in 2023, capitalizing on opportunities across various industries, assets, and transaction types, as highlighted in a recent report from EY. By investing capital strategically, some funds obtained top-tier assets at discounted prices, while others discovered new entry points in response to macroeconomic trends. Here are some of the key takeaways featured in the report: > 2023 ended on a high note, with firms announcing deals worth a total of US$124 billion, making it the most active quarter in terms of value. The final quarter of the year saw an impressive 11% increase in value compared to Q3. > November was particularly busy, coming in as the second-most active month in the past year and a half, with deal announcements totaling US$71 billion. The steady volume in Q4 highlights the increasing prominence of larger deals. > Despite facing several obstacles in the mergers and acquisitions market in 2023, including inflationary pressures, rising interest rates, geopolitical instability, and macroeconomic uncertainty, private equity firms remained a significant player, accounting for 25% of aggregate M&A activity. > With rising interest rates, the value of operational value-add continues to increase, further emphasizing the adaptability and strategic expertise of private equity firms. Read more from the report here: https://lnkd.in/eFtFuESQ #PrivateEquity #Leadership #IPO

Despite challenges, Private Equity (PE) showed remarkable resilience in 2023. The industry adapted with agility, deploying capital across different verticals, asset classes, and transaction types. Key highlights from the year included: ◾ Last year closed on a strong note, with firms announcing deals valued at US$124b, making it the most active quarter of the year by value. ◾ PE remained resilient in 2023 as firms opportunistically deployed capital across a range of verticals, asset classes, and transaction types. ◾ Higher interest rates will continue to elevate the value of operational value-add. For more insights, check out the full piece from EY here: https://lnkd.in/eP7J9sAv #PrivateEquty #PE #ProfessionalServices

Driving value and creating wealth in portfolio companies will be central in the next five years given many factors including the higher cost of capital. To get better returns, PE Firms will have to work harder, get more involved and provide strategic advice and support to their portfolio management teams. It will be still achievable, particularly for those firms willing to retain and invest in a Strategic sector and Operating Partner to drive the value thesis. #privateequity #operatingpartner #strategicleadership #capitalmarkets #pensionfunds

Deal activity is broadly expected to increase significantly in 2025. In this article, Bain & Company digs into #pe exits and the challenges portfolio companies will face given the market conditions of the last 24 months. Great insights on how these portfolio companies are going to have to address #valuecreation and #exitreadiness in a way that is different than in times past. Our discussions with #privateequity funds completely align to what this team is pointing out in the article. #exits #privateequity #pe #portfoliocompany #exitreadiness #deals #officeofthecfo

📈 While the reversal of rate hikes has lagged what markets were pricing in at the start of this year, momentum in deal making continues to build. 💸 The $365b in capital deployed this year marks a 36% increase versus the same period in 2023, with the last six months the most active period for investment since heightened volatility began to drag on deal markets. 🥇 As competition intensifies in the financing markets, the valuation gap narrows, and market sentiment improves further, outperformance will be driven by GPs' origination capabilities and ability to capitalize on a significantly expanded opportunity set. For deeper insights into the current trends and outlook for #PrivateEquity, check out EY's latest PE Pulse report. #PrivateEquity #EYInsights #Investment #EY

2023 was a standout year for Private Equity. Despite challenges, firms ended the year strong with a notable 11% increase in activity from Q3 to Q4.   By having a fresh look at the PE playbook firms were able to find new ways to grow across different areas and pave the way for increased activity in 2024. Find out more: https://lnkd.in/dcYC-H3M #PrivateEquity #BetterWorkingWorld

📊 Private equity grapples with record 28K unsold firms worth $3tn. Bain report highlights challenges from deal slowdown & higher rates. Concerns grow, returns may take 2-3 years. 2023 saw 44% dip in combined company value. Liquidity struggles prompt alternative funding tactics. Over 40% waiting-to-sell firms are 4+ years old, posing a multiyear issue. Positive trend in secondaries market, doubling money raised. Hints of traditional IPO comeback amid asset-selling hurdles. Full report: https://lnkd.in/dTmGEVpk #PrivateEquity #Investing #Finance #Economy 🌐

📊 @Bain & Company’s 2024 Private Equity Midyear Report highlights a potential bottoming out of the two-year slump in global private equity. While activity is stabilizing, momentum remains scarce due to macro-economic uncertainties and high interest rates. Notably, exits have halted their decline, and deal pipelines show "green shoots" of recovery. However, challenges like managing interest rates and enhancing value creation persist. Read more details about the report here: https://lnkd.in/dbEPfauq 📈 #PrivateEquity #BainReport #Investment #Finance #BusinessGrowth #PEIndustry #GlobalEconomy

The era of easy returns in private equity (PE) is behind us. With a more challenging economic landscape, PE firms can no longer rely on simple financial engineering to deliver returns. 📉 As highlighted in the Financial Times article, "Private equity: The lazy days are over", industry leaders are facing higher interest rates and market uncertainties, requiring a shift towards operational improvements and active management. 🔸 End of Easy Leverage: High interest rates and expensive debt have brought an end to leverage-driven high returns. Now, PE firms must focus on boosting operational efficiency within their portfolio companies to achieve desired returns. 🔸 Tougher Exits: Despite central bank rate cuts, M&A activity and IPOs have not picked up as expected, making exits more difficult. PE firms are exploring alternatives such as partial monetization, selling stakes, and continuation funds to realize value. 🔸 Demand for Quality Businesses: Even with challenging exit conditions, demand remains strong for high-quality, cash-generative businesses, particularly from strategic buyers. Implications for Buy-and-Build Strategies: 🔸 Selective Acquisition Targets: With rising financing costs, PE firms need to be more discerning when choosing acquisitions. The focus should now be on companies offering the most potential for synergies and operational improvements, rather than simply scaling. 🔸 Margin Expansion over Multiple Expansion: To drive returns, PE firms should prioritize expanding margins through operational efficiencies, cost reductions, and unlocking synergies via platform integration, instead of relying on multiple expansion, especially in secondaries. 🔸 Longer Holding Periods: Tougher exit environments may require firms to hold investments longer. Buy-and-build strategies should therefore focus on organic growth and improving margins to sustain value over extended periods. As PE adapts to these new challenges, buy-and-build strategies will need to become more disciplined, operationally focused, and value-driven to succeed in today’s market. 💼 📲 Follow us for the latest insights and updates! #PrivateEquity #BuyAndBuild #InvestmentStrategy #OperationalExcellence #Finance #PrivateMarkets #MergersAndAcquisitions #InvestmentOpportunities #GlobalInvestment #BusinessStrategy #MarketTrends

Private Equity Firms Are Holding A Record Number Of Unsold Companies 🏷️ PE firms are like house flippers, but for businesses. They pool money, borrow some more, buy a company, and then spruce it up – all in the hope of selling it for a profit down the line. But lately that whole “selling it” bit hasn’t been that easy due to a big slowdown in dealmaking activity (spurred by higher borrowing costs). Case in point: PE groups globally are currently sitting on a record 28,000 unsold companies worth more than $3 trillion, according to a new report by Bain & Company. More than 40% of the firms waiting to be sold are at least four years old – a sign that their owners are overdue in selling them considering that PE groups typically hold portfolio companies for three to five years. This backlog is starting to cause big problems for the industry, as it hampers PE firms' ability to return money to investors looking to exit. Against this unfavorable backdrop, PE firms are using alternative money-raising tactics to return cash to their investors, including borrowing against the value of the assets in their portfolios. Problem is, those assets are companies that the PE firms acquired using boatloads of debt. Put differently, PE firms are returning cash to investors by adding yet ANOTHER layer of debt to their portfolios at a time when interest rates are really high. If it sounds risky, it is, and investors are increasingly voicing their concerns over the practice, arguing that returns are being tilted too far toward financial engineering rather than investee companies’ underlying performances. There is some good news, however, with growing signs that the traditional initial public offering (IPO) exit route is making a comeback in Europe, with two PE-owned companies recently announcing plans to list on the stock market. In fact, companies have raised $3.2 billion in European IPOs since January – more than double the amount over the same period last year, and a performance that puts the market on track for its best first quarter since 2021. As PE firms navigate through a sea of challenges, this recent revival in IPOs could offer them a glimmer of hope. Now let’s see if they can use the rebound strategically… Via Finimize. #markets #finance #investing #invest #investment #privateequity #ipos #lbos