PE Pulse: five takeaways from 2Q 2023

PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends.

Visit Private Equity Pulse: Takeaways from Q2 2023 to view this quarter’s summary and infographic.  

PE activity modestly ticked compared with the previous quarter and the increase was driven by a steep rise in Europe, where firms announced acquisitions valued at more than US$38b, more than four times the amount announced in Q1.

PE firms will remain focused on acting opportunistically to invest in high quality assets in spaces with clear long-term secular tailwinds. Most importantly, they’ll remain focused on pulling all available operational levers to ensure that existing portfolio companies not only survive today’s macro uncertainty, but are positioned to outperform as economic growth begins to accelerate. 

Key takeaways:

• PE firms announced deals valued at US$213b, precisely in line with the second half of last year, but significantly less than the US$545b announced in the first half of 2022.
• However, with markets stabilizing in recent weeks – in the US, for example, the S&P 500 rose more than 8% in Q2 – some of that bargain-hunting has begun to abate.
• Exits experienced a modest rebound in the second quarter with firms announcing transactions valued at US$84b in Q2. Activity was driven by a marked increase in sales to strategic acquirers, which grew nearly 90% from Q1.
• Tech deals accounted for one-quarter of PE’s total spend; in the first half of this year, the percentage grew to more than one-third, the result of PE’s take-private push in the early months of the year.
• The accelerated expansion of that asset class will continue, with more companies in the middle market and upper middle market space turning to credit funds for their everyday borrowing needs.

For your convenience, full text transcript of this podcast is also available. Read the transcript.