Pitchbook released updated charts on purchase price multiples that illustrate how deal multiples were higher in the second half of 2024 and are close to the highs reported in 2022.
The takeaways are:
Purchase price multiples are close to all-time highs.
Current deals are funded with more equity as a percentage of the total purchase price.
Total debt is creeping up from 2023, but still below the levels reported in 2014 to 2022.
From a credit lender perspective, deals are less levered and provide more cushion, yet spreads on private credit are still elevated.
What this means for private equity
The result for private equity funds—due to a higher equity as a percentage of the purchase price—is lower returns versus historical periods, but initial purchase prices are better than in the public markets, where the S&P has a price-to-earnings (P/E) ratio above 25 as of January 2025.
By the numbers
Explore the latest private equity trends as depicted by Pitchbook:
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