The US Private Equity Forecast 2023 features a survey of 100 senior executives from PE firms based in the US, and explores how they are adapting their approach in a challenging market and what they expect to see in the months ahead.
Our findings show there are opportunities which are ready to be seized upon, and that shrewd dealmakers who make the most of those opportunities may yet turn 2023 and 2024 into some of the best vintage years.
Highlights include:
- Overall, the outlook is challenging. Most managers expect fundraising to become more difficult. Exit activity and deployment are projected to slow. Widening bid-ask spreads are choking deal flow and PE is preparing to hold assets for longer.
- The industry is evolving rapidly. PE is finding ways to protect portfolio company value, unlock liquidity for investors, take advantage of new pools of debt financing, and explore avenues for new deals and exits.
- AI and infrastructure are highly attractive. Despite having the widest bid-ask spreads, our report reveals how these categories will see the highest levels of PE activity over the next 12 months. Also expect declines in PE activity around Transport, Business Services, and Financial Institutions.
- Size and scale are increasingly important. The largest funds are more optimistic about their fundraising, deployment, exit and portfolio performance than smaller managers. Industry consolidation has been much discussed, and the pressures facing the market now look set to make this a reality.
- State-of-the-art tech & research are essential. Deep specialisation and sector expertise are now must-haves. Deal sourcing is far more complex and when assets do come to market, there is a cluster of funds ready to transact. Firms with the best systems and industry-specific knowledge have a huge advantage.
