PE Industry Rebounds in 2024, But Challenges Persist Amid Economic Shifts
- Editor
- Jan 20
- 2 min read
What's New
According to PitchBook's 2024 Annual US PE Breakdown, private equity dealmaking showed strong recovery in 2024, with deal value increasing 19.3% to $838.5 billion and deal count growing 12.8% to 8,473 deals, marking a decisive turnaround from the 2023 slowdown.
Why It Matters This rebound signals improving market conditions and growing confidence among investors, but the recovery remains uneven across sectors and strategies, reflecting broader economic uncertainties and evolving market dynamics.
Big Picture Drivers
Rates: Fed's cumulative 100-basis-point cuts improved financing conditions and deal sentiment
Valuations: EBITDA multiples increased to 12.2x in 2024, recovering from 10.5x in 2023
Technology: Sector led recovery with 32.4% YoY growth in deal value, driven by software investments
Exit Activity: Surged 49% in value and 16.6% in count YoY, boosted by corporate buyers and IPO revival
By The Numbers
$838.5B: Total PE deal value in 2024
8,473: Total number of PE deals completed
$413.2B: Total exit value (up 49% YoY)
$284.6B: Total fundraising (down from $395B in 2023)
16.2 months: Median time to close funds (up from 13.8)
Key Trends to Watch
Continuation funds are emerging as a crucial "third rail" for exits alongside traditional M&A and IPOs, with 96 such transactions completed in 2024.
Middle-market funds are seeing increased investor interest as they offer more favorable valuations and easier financing access.
Corporate buyers maintain advantage in exits due to their ability to tap bond markets and use stock as acquisition currency.
Megafund performance has regained leadership after six quarters of middle-market outperformance.
The Wrap
While PE activity has rebounded significantly, the industry faces a transitional period marked by evolving exit strategies, changing fundraising dynamics, and shifting sector preferences. Success in 2025 will require adaptability to these new market realities.
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