As a tough year for the European private equity (PE) draws to an end, Mergermarket’s private funds editorial team gives a market overview and highlights key topics including the resilience of the mid-market, consolidation in the advisor space, and the popularity of co-investments.
The last 12 months brought with them the collapse of Credit Suisse and Silicon Valley Bank; a return to higher interest rates; and yet more geopolitical uncertainty and conflict.
Although private equity activity has remained subdued this year, particularly versus the highs of 2021 and 2022, the industry has continued to innovate and adapt, looking for ways to get deals done and maintain liquidity.
Consolidation remains an ongoing theme in the private equity industry – not only via value creation through buy-and-build, but in the form of asset managers acquiring specialised and mid-market firms. The mid-market has seen consistent dealflow and exits against a tough backdrop, leading larger sponsors to re-enter the mid-market so as not to miss out.
The PE advisory industry has also been busy consolidating amid a drop in dealflow and therefore a drop in fees, with more consolidation on the cards for 2024 as advisers look to gain market share and add new capabilities to their roster.
Structuring deals in 2023 has been challenging in a higher cost of capital environment, leading GPs to explore options including adding more equity into deals in the form of co-investments. These deals also have benefits to LPs including relationship-building and an opportunity to gain in-depth insights on how their GPs operate.
0:55 – Market overview
2:20 – Mid-market outlook with Rachel Lewis
11:48 – PE advisory consolidation with Min Ho
17:51 – Co-investment perspectives with Ero Partsakoulaki
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If you would like to hear more podcasts produced by ION Analytics, you can access the ION Analytics channel on Apple Podcasts.
Theme music: ©2012 Kick Up The Fire
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