After historic, post-pandemic private equity activity from Q3 2020 through Q3 2022, the last two years have been marked by an extended slowdown. 

Valuation gaps between buyers and sellers driven by uncertainty around over-performance in many sectors during the height of COVID, plus concerns around the rising cost of capital and inflation, led PE firms to mostly sit on the deal sidelines.

During this time, PE firms have focused on shoring up portfolio company performance and preparing for exits. 

Beyond historically high levels of dry powder, increasing pressure from LPs to return capital, plus an expected uptick in corporate carve-outs and full enterprise sales should make for an active 2025 for private equity. What do you think? 

“PE firms are sitting on record amounts of dry powder that they will need to deploy,” said Glenn Mincey, U.S. head of private equity at KPMG. “But perhaps more importantly, PE firms have held a surplus of assets for longer than they anticipated, and many will need to sell those assets soon to fund returns to their investors.”

https://www.cfo.com/news/private-equity-firms-set-their-sights-on-an-ma-surge/724708/