Global Private Equity Factbook – Q2 2023

Amid difficult macroeconomic circumstances and increased financing expense, the second quarter of 2023 showed a positive upturn in global private equity investments. This encouraging trend can largely be attributed to the influence of private credit. The momentum in deal-making is expected to persist, fueled by ample funds and a strong focus on expansion strategies.

In the dynamic landscape of Q2 2023, deal activities experienced an 11% surge, predominantly fueled by a notable increase in the volume of add-on deals. However, the enthusiasm for larger buyout transactions was dampened by the ripple effects of higher interest rates and lingering economic uncertainties. Private investment in public equity strategies and growth/expansion transactions together accounted for a substantial 77% of the total deal volume. Capital deployment surged 17% to USD465 billion, largely driven by private investments. While North America, MENA, and Latin America experienced heightened investment activities, Europe's decline persisted as a notable contrast.

PE exits saw a considerable surge, mainly due to secondary sales and IPOs. Simultaneously, the fundraising domain expanded its horizons, shining a spotlight on buyout and growth capital funds. Major sectors driving PE investments included IT, healthcare, and financial services. These sectors collectively accounted for 71% of the total invested capital, solidifying their significance in shaping the investment landscape.

Investment momentum is likely to continue in 2023, led by available dry powder and heightened interest in carve-out deals, as PE firms seek to acquire business segments within portfolio companies with the aim of unlocking their latent potential.

This edition of the Global Private Equity Factbook offers insights on global PE investment activity, features key sectors targeted, and provides an outlook for the industry in the coming quarter.