Peak North’s Post

🚀 Global Private Equity: Stabilizing but Still Searching for Momentum 🚀 The private equity (PE) sector is showing signs of stabilization after a two-year decline in deal-making and exits. However, the road to recovery is filled with challenges, and activity remains subdued compared to historical standards. 🔹 Deal Trends: Through May 15, 2024, global PE buyout deal counts are down 4% annually, expected to remain flat for the year. Yet, deal values are projected to rise 18% to $521 billion, driven by larger average deal sizes. 🔹 Exits and Fundraising: Exit values are set to increase by 17% to $361 billion, marking the second-worst year for exits since 2016. Fundraising is forecasted at $1.1 trillion, a 15% decline from last year, with significant disparities as the top 10 funds capture 64% of total capital. 🔹 Challenges Ahead: Higher interest rates, geopolitical instability, and a gridlock in exits are major hurdles. PE firms need to adapt to the "new normal" and focus on value creation in their portfolio companies. 🔹 Pressure on GPs: The slump in exits pressures General Partners (GPs) to return capital to Limited Partners (LPs), impacting new fundraising efforts. Only a small minority of LPs are satisfied with GPs' urgency in increasing liquidity. 🔹 Optimism and Strategy: Despite challenges, there's optimism as deal pipelines begin to refill. A full recovery may take time, but the initial public offering (IPO) market shows promise. PE firms must understand LP expectations, develop strategic plans, and focus on value creation to navigate these turbulent times. 🔹 Top Global PE Deals in 2024: Toshiba: $15B take private deal by Japan Industrial Partners. Qualtrics: $12.5B take private deal by Silver Lake and CPPIB. Worldpay: $11.4B leveraged buyout by GTCR. 💡 As we move forward, adapting to the changing landscape and making decisive moves will be crucial for success. The PE industry is at an inflection point— it's a time to embrace the challenge and drive growth! Credit: Bain & Company, EY, Preqin, PitchBook, Dealogic #PrivateEquity #Investment #Finance #BusinessGrowth #MarketTrends #DealMaking #Fundraising #IPO #Strategy #Leadership #ValueCreation Peak North

2025 Private Equity Market Outlook and IPO Opportunities As we step into 2025, the landscape for global private equity markets is poised for a transformative year. Here's what you need to know: Market Trends: Interest Rate Cuts: Lower interest rates are anticipated to fuel a resurgence in deal-making activities, providing a more favourable environment for PE investments. This could lead to increased PE deal flow, particularly in carve-outs and take-private transactions. Value Creation Focus: Post-election market sentiment has improved, with a renewed focus on operational efficiencies and value creation rather than just financial engineering. PE firms are expected to leverage strategies like pricing optimization and tech integration to boost portfolio companies. Dry Powder Deployment: With a record amount of uninvested capital, or "dry powder," PE firms are under pressure to deploy this capital into promising sectors, including technology, healthcare, and consumer goods. IPO Potential: Rebound in Public Markets: The IPO market is set for a comeback, with expectations of a significant uptick in listings, driven by private equity firms looking to exit mature investments. The combination of pent-up demand and a backlog of IPO candidates suggests a vibrant market for new listings. Strong Pipeline: Over 700 unicorns are currently in the private market, many of which are preparing for an IPO. Companies with solid business models, proven profitability, or a clear path to it are particularly well-positioned. Sector-Specific Opportunities: Sectors like AI, infrastructure, and those with strong ESG credentials are likely to attract significant investor interest, potentially leading to successful IPOs. Strategic Considerations for 2025: Preparation for Market Windows: Given the cyclical nature of IPO markets, companies should start preparing well in advance to capture investor interest when windows open. Regulatory Environment: With potential policy shifts under a new administration, PE firms and IPO candidates must stay agile, adapting to changes in regulations that could impact market entry and exits. Global Dynamics: Geopolitical shifts, interest rate policies, and ESG considerations will continue to shape investment and exit strategies. Firms need to navigate these with robust risk management practices. As we look ahead, the synergy between innovation, regulatory adaptation, and strategic exits through IPOs could define the year for private equity. #PrivateEquity #IPO #MarketOutlook2025 #InvestmentStrategy #BusinessGrowth

According to an Institutional Investor article, IPOs globally have fallen considerably by 45 percent between 2021-2023 and have jolted the investments in private markets. "Private market assets under management are expected to grow at about 9 percent annually through 2032, more than twice the rate of public market assets. By 2032, total private assets could reach at least $60 trillion, according to Bain & Co."

The Evolution of Private Equity: Insights from 2024 and What to Expect in 2025 📈As we wrap up 2024, the private equity (PE) industry has shown remarkable resilience and adaptability. This year, we witnessed a significant rebound in M&A activity, with global PE-backed transactions soaring by 40% compared to last year. Key trends shaping this evolution include: 🔑 1. Growth of Private Credit: Direct lenders now dominate the buyout loan market, reflecting a shift towards alternative financing sources. 🔑 2. Focus on Value Creation: PE firms are increasingly leveraging technology, including AI and machine learning, to enhance operational efficiencies and drive profitability. 🔑 3. Rise of Secondary Markets: Limited partners are actively managing liquidity through secondary market transactions, creating new opportunities for investors. 🔑 4. Technological Integration: Technology investments are booming, particularly in data infrastructure and healthcare, accounting for 40% of PE deployment by value in Q3 2024. Looking ahead to 2025, several trends will continue to shape the landscape:🔮 Increased M&A Activity: With potential interest rate cuts on the horizon, we can expect a surge in deal-making as firms aim to deploy their substantial dry powder effectively. 🔮 Sustainable Investment Practices: The emphasis on ESG considerations will only grow stronger, as investors seek to balance financial returns with responsible practices. The future is bright for private equity as it embraces innovation and strategic growth. #PrivateEquity #Investment #MergersAndAcquisitions #ESG #Technology #Finance #2025Trends

The median holding period for private equity-backed portfolio companies is now 5.7 years, the highest value since Private Equity Info began tracking this metric in 2000.  We see this as a great trend, because it causes less disruption at the companies and gives the private equity firms longer to grow the companies and increase value. What are your thoughts? #privateequity #valuations #businessvaluations

Private equity has historically outperformed public markets across various time horizons, driven by the active engagement of managers in strategy and value creation. KKR cites examples of this hands-on approach and highlights how the private market offers a growing opportunity set as the number of public companies declines. Alisa Wood and Chris Harrington | KKR https://lnkd.in/dS_f8me5 #LBO #Buyouts

Bain: Spiking interest rates derailed dealmaking in 2023 and left the private equity ecosystem sputtering. Getting unstuck is job one. The exit drought has emerged as a big problem, as LPs starved for distributions pull back on new allocations. #privateequity #ipo #exit

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

As we welcome 2025, the global M&A landscape is poised for significant growth. According to Reuters, analysts anticipate that global deal volumes will exceed $4 trillion, marking the highest level in four years. This optimistic outlook is fueled by three powerful drivers: • Pro-Business Policies: The incoming administration's commitment to reducing regulation and lowering corporate taxes is expected to create a more favorable environment for dealmaking. • Improved Financing Conditions: Recent interest rate cuts have enhanced the financing environment, making it more conducive for mergers and acquisitions. • Private Equity's Momentum: With significant capital reserves, private equity firms are expected to play a central role in driving deal volumes. One sector to watch is technology, where M&A activity is projected to dominate, reflecting innovation and transformation across industries. For investors and corporate leaders, staying informed and proactive in this evolving landscape is essential to unlocking growth opportunities. What industries or trends do you see leading the charge in 2025? Share your thoughts in the comments! For more insights, check out the full article. #MergersAndAcquisitions #EconomicGrowth #InvestmentOpportunities

What’s Next for Private Equity (PE)-backed M&A? The world of private equity (PE) is navigating challenging yet exciting times. After a quieter period in 2023, PE activity is steadily picking up in 2024, with trends signaling a shift in deal-making strategies and opportunities. In the latest Q&A from Financier Worldwide, industry leaders explore how private equity (PE) firms navigate the challenges of rising interest rates and valuation discrepancies. https://lnkd.in/e_ktYyBZ Experts provide predictions on PE-backed deal activity in the coming months, offering strategic advice to PE firms on executing successful transactions in today’s M&A market. They also delve into the key factors driving PE-backed deals and outline the benefits for businesses acquired by PE firms. From operational improvements to innovative financing structures, today’s PE firms are focusing more on creating long-term value and “sweating the assets”. The latter means that financial sponsors (like investors or private equity firms) need to be more proactive in improving the companies they invest in. They can't just rely on buying a company and hoping its value grows on its own. Instead, they should: - Focus on making the company more efficient and profitable. - Invest in the company's people and technology to keep it competitive. - Grow the business by expanding into new areas or buying smaller companies at a lower cost to increase its size and value. As interest rates begin to stabilize and geopolitical uncertainties diminish, we are seeing heightened activity in sectors like tech, healthcare, and renewable energy. Exit strategies are also evolving—more structured, strategic, and reliant on robust governance and management teams. With over $1 trillion in dry powder ready to deploy, PE firms are poised to capitalize on the upcoming wave of M&A and IPO opportunities. The outlook is optimistic for PE-backed deals. The key to success? Agility, comprehensive due diligence, and a focus on long-term value creation. Now is the time for PE professionals to prepare for the next wave of exits and seize opportunities in a rapidly changing market. #privateequity #mergersandacquisitions #pedeals #investmenttrends #businessgrowth #mamarket