Global Private Equity Factbook – Q3 2023

In Q3 2023, private equity showed resilience by increasing capital investments despite a dip in deal volume. Although the industry foresees growth supported by the availability of dry powder, the potential influence of rising interest rates and accumulating debt could impede the pace of recovery.

In the third quarter of 2023, the private equity industry showcased resilience by recording a 19% surge in capital investments, in spite of a 14% drop in deal volume. Investors directed their focus toward add-ons and investments in public equity, with private investment in public equity and buyouts comprising around 72% of the overall deal volume. Furthermore, various deal structures such as add-ons and carve-outs gained traction, and investors allocated 47% of total PE capital to sectors such as IT, financial services, and healthcare.

Deal activity saw a significant uptick in Europe and Asia-Pacific, with North America witnessing a moderate decline in investments. Private equity exits rebounded, predominantly fueled by the expansion of buyouts, albeit with a decrease in IPO exits in Q3 2023. Additionally, fundraising continued to pose challenges for private equity firms.

The expected revival in private equity deals is driven by an unprecedented level of dry powder available for deployment. Nevertheless, the potential for growth is tempered by elevated interest rates and increasing debt burdens, suggesting a more measured recovery.

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.