The private equity industry had a challenging year, characterized by weak deal activity and a general decline in exits and fundraising. However, as the second half progressed, interest rates were put on hold and inflation started to recede, raising hopes for a revival of deals in 2024.
The top 10 most read private equity stories highlight the year's key events and include private equity's approach to artificial intelligence adoption, the surge in private credit as high interest rates prompted borrowers to look for alternative lending sources, as well as the issues surrounding fundraising.
Most read private equity articles
1. Private equity firms take tentative steps adopting AI for their own use
Private equity firms embraced AI adoption, led by major players like The Carlyle Group and Blackstone. The industry is exploring AI applications, from developing tools for investment decisions to analyzing proprietary data, though concerns about data security and bias remain.
2. Private equity fundraising sentiment bleak in 2023
Fundraising sentiment among private equity firms remains pessimistic, with 45% expecting deteriorating conditions, an S&P Global Market Intelligence survey reveals. Venture capital executives also expressed caution, with 35% expecting challenges in fundraising.
3. Private credit boom continues; pressure builds on Europe's debt market
Private credit is expected to maintain strong momentum for several years amid an ongoing shift away from traditional lenders, according to The Wall Street Journal.
4. TA Associates tops annual ranking of large PE firm performance
TA Associates Management LP secures the top spot in the 2022 HEC-DowJones Private Equity Performance Rankings among 560 large firms, underscoring the importance of a tech-focused portfolio.
5. Private equity investments in AI, machine learning tick up in Q1
Global private equity deal value in the artificial intelligence and machine learning sector rebounded in the first quarter of 2023, totaling $5.81 billion across 247 transactions, a 49.7% surge compared to the preceding quarter.
6. Longer hold times put private equity strategies to the test
A weak environment for exits prompt private equity firms to lengthen hold times for portfolio companies, testing value-creation strategies. The extended periods may reward skilled operators but pose challenges for over-leveraged investments as interest rates remain high.
7. Fund launches cratered in 2022; private equity's share of terminated deals grows
Private equity fund launches declined significantly in 2022, totaling 481 funds compared to 1,464 in the previous year. Meanwhile, private equity's portion of terminated M&A deals doubled in the fourth quarter, hitting 10% and suggesting difficulty in closing deals amid macroeconomic conditions.
8. PE exits a growing segment of deals with earnout provisions
Private equity exits increasingly incorporate earnout provisions and accounted for over 22% of the $26.86 billion in earnout payments for overall M&A deals between Jan. 1 and June 19, S&P Global Market Intelligence data shows.
9. A 5-year sector view of global limited partner co-investments with private equity
The slowdown in overall private equity activity led to increased collaboration between limited partners and fund managers, driving more co-investment opportunities. Sovereign wealth funds led co-investments the last five years, contributing the highest total amount of $331.41 billion across 469 deals.
10. Global venture capital deal value falls 66.7% YOY in December 2022
Global venture capital deal value saw a 66.7% year-over-year decline in December 2022, totaling $19.71 billion, S&P Global Market Intelligence data shows. The monthly result showed a 4% decrease in the total value of venture capital-backed funding rounds compared to November 2022.
