M&A Year in Review 2023 brochure - Flipbook - Page 88
88
Private Equity
2024 is expected to be a busy time for private
equity, particularly for the middle-market.
Financial sponsors will be under pressure to
deploy capital to demonstrate to investors that
they are putting their money to good use before
investment periods expire. Private equity
sellers will also feel pressure to harvest their
portfolio and return capital to their investors.
This combination of factors will bring willing
buyers and sellers to the table at
stabilized valuations and will increase the
amount of dealmaking.
In addition to the increase of traditional buyout
transactions, sponsors will have a tranche of
investments from a few years ago that will need
to be refinanced and will need to make difficult
decisions to meet their existing debt obligations.
We expect more stressed and distressed M&A
opportunities to appear in the market and debtfor-equity swaps for those businesses where
lenders are willing to back management in the
hope of a successful turnaround.
NAV lending, structured preferred equity, and
GP-led transactions have become and are likely
to continue to become even more popular
approaches for private equity to realize some
cash from investments, without triggering a “fire
sale” or foregoing all ordinary equity future
upside. European IPO market activity remains
muted, but the U.S. IPO market has shown early
signs of opening and creates an alternative exit
route for sponsors. Private credit will continue to
grow, as investors look for creative opportunities
where traditional lenders are less comfortable.
