Studies

Private equity investment in infrastructure is showing renewed strength as macroeconomic uncertainties stabilize, according to the latest Infrastructure Strategy 2025 report by Boston Consulting Group (BCG).

According to BCG, the private infrastructure market, which has navigated fluctuating deal volumes in recent years, reached an all-time high of $1.3 trillion in assets under management as of June 2024, a strong indicator of investor confidence in the asset class.

Although fundraising remains below its 2022 peak, infrastructure funds secured $87 billion in 2024, reflecting a 14% year-over-year increase. Meanwhile, transaction volume declined by 8%, following a 19% drop in 2023. Despite this, large-scale transactions in the digital infrastructure and energy transition sectors may suggest a rebound as investors look to reinvest capital and capitalize on emerging transaction opportunities.

A notable trend in infrastructure investment has been the growing interest in digital assets, particularly data centers. With AI and cloud computing demand surging, investments in data centers soared to $50 billion in 2024, a substantial rise from $11 billion in 2020. At the same time, energy transition investments, including renewable energy and battery storage, continue to attract funding.

“Infrastructure remains a cornerstone of private investment strategies, offering stability and inflation protection in volatile markets,” said Wilhelm Schmundt, a managing director and senior partner at BCG and the firm’s lead for infrastructure investment. “As investors adjust to a maturing market, we see significant opportunities emerging in energy transition, digital infrastructure, and new investment structures designed to attract capital.”

Private equity and infrastructure funds are adapting to these shifts through industry consolidation, expanded investment mandates, and operational efficiencies.

Within the infrastructure sector, mergers and acquisitions (M&A) have become a key strategy for general partners, with some funds scaling up into diversified infrastructure platforms while others focus on specialized sector-specific plays. New fund structures, including continuation vehicles and sector-specific funds, are also gaining traction, providing limited partners with more tailored investment opportunities. As governments increasingly turn to private capital to bridge infrastructure funding gaps, co-investment opportunities are also expected to rise.

“Private investment will be critical to modernizing infrastructure and meeting the world’s growing connectivity and energy needs,” said Alex Wright, a managing director and partner at BCG. “With capital deployment expected to accelerate in 2025, we anticipate a more dynamic investment landscape, particularly in AI-driven infrastructure, renewables, and smart grids.”

A PDF of BCG’s Infrastructure Strategy 2025 report can be accessed HERE.

© 2025 Private Equity Professional | March 18, 2025

The State of the Game
The private credit arms race has taken the industry landscape by storm, with Ken Moelis citing the shift as the “greatest change in the history of transactional finance.”^[1] Already enjoying years of measured growth, when banks and the broadly syndicated loan market stepped back from lending in 2023 due to market volatility, private credit stepped up, cementing private credit’s position as a force in financing markets. This has created a very active M&A and joint-venture market that does not seem to be slowing anytime soon.

BlackRock made headlines in late 2024 through the firm’s acquisition of HPS Investment Partners, backed by their expectation that the private debt market will more than double to $4.5 trillion by 2030.^[2] While BlackRock’s acquisition dominated the news cycle, other firms have already made it their prerogative to jump into the private credit pool. In late 2024, Wendel Group acquired a majority stake in Monroe Capital, and Third Point (Dan Loeb’s hedge fund) acquired AS Birch Grove. In late 2023, TPG bought Angelo Gordon, and going even further back, Eldridge Industries acquired a majority stake of Maranon Capital in 2019. Eldridge recently announced a rebrand of its combined private credit vehicles, including Maranon and Stonebriar Commercial Finance, as “Eldridge Corporate Credit.”

The sector has become extremely attractive for investors, with LPs and asset managers pouring money into private credit.

Banks have also taken the plunge to offer product and garner revenue lost within their traditional lending and leveraged finance practices (most notably broadly syndicated loans or “BSL”). Wells Fargo and Centerbridge Partners joined forces in late 2023, PNC and TCW Group followed suit, and then in September 2024, Citibank and Apollo created a direct lending program with a goal of financing “approximately $25 billion of debt opportunities over the next several years, encompassing both corporate and financial sponsor transactions.” ^[3]

Consolidation Drivers
What is driving the push towards consolidation and bank / private credit partnerships occurring in the market? The sector has become extremely attractive for investors, with LPs and asset managers pouring money into private credit. It has even been a more favored asset class over private equity in the last few years (though the markets are intertwined). Fundraising for private credit reached $207B through Q3 of 2024, an increase from $193B over the same period in 2023, while average vehicle size approached $1.2B, marking 2024 as the first year for average vehicle size to eclipse $1B.^[4] Meanwhile private equity was on pace for its lowest annual fundraising total since 2020, having raised only $234B through September.⁵

Additionally, private credit is increasingly competitive against (and in some instances more attractive than) BSLs. From 2022 through 2024, private-credit-financed buyouts outnumbered BSL financed deals 6 to 1. To compete against the BSL market, private credit needed significant size and scale, and the sector has done just that — 40%+ of private debt capital raised was for funds over $5B, while five years ago, only 20% of capital was for funds over $5B.^[5]

Conflicts of interest, particularly arising from JVs between banks and private credit, could also create tension.

Lastly, the dearth of overall M&A activity over the last 12 – 24 months has provided the perfect environment for dealmaking at the fund level. A respite offered by relatively slower activity and deployment caused managers to explore and execute on transformational initiatives such as acquisition(s) for scale and / or Joint Venture(s) to broaden offerings.

The Good, the Bad and the Ugly
Regarding the upside for borrowers, the primary benefit is that investment in the market means more capital, which results in more competition and better terms. Additionally, the upper end of the market will be deeper than it has been historically.

The bad? The shift could result in a turnover in deal teams, specifically regarding who covers the deal. The team that closes a deal may not necessarily manage the relationship going forward.

Conflicts of interest, particularly arising from JVs between banks and private credit, could also create tension. These nascent alliances will require a delicate balance between investment banking divisions, leveraged finance departments, commercial and corporate lending, sales and trading desks, ancillary banking offerings (e.g., hedging, treasury), fund financing, and more. In an ultimate downside scenario, could this lead to a Volcker Rule 2.0? The original legislation, of course, limited banking entities’ relationships with private equity funds.

In addition to the aforementioned dynamics, rapid evolution means sponsors and borrowers face an increasingly difficult task with lender coverage.

Additionally, the traditional capital directed towards the middle market may get lighter. Private credit, which used to focus on smaller deals, has moved upward to compete in the BSL universe. Funds are moving up market for $100 – 200M minimum check sizes, leaving a shrinking number of players in the $30 – 75M size range.

Lastly — the ugly. As with any deal, not all of them are successful. Unfortunately, some mergers and JVs have significant integration issues and could leave borrowers scrambling for the next step. Onex’s 2020 purchase of Falcon Investment Advisors lasted less than four years, as Onex divested its majority stake of the ~$4B AUM credit fund in Q3 2024.^[6] Similarly, Voya divested Czech Asset Management less than three years after acquiring the ~$5B AUM direct lender. Although the Onex/Falcon separation was due to synergies across the remainder of Onex platforms failing to materialize (and no rationale has yet been provided for Voya / Czech), other “break-ups” could be much worse and have a spillover effect for borrowers.

Considering the Above
While it’s an exciting time for participants in the private credit market with increased activity and interest, there are, of course, factors that may affect sponsors and borrowers. In addition to the aforementioned dynamics, rapid evolution means sponsors and borrowers face an increasingly difficult task with lender coverage — which in turn lends itself to better terms and best execution. With new funds forming, investment parameters shifting, and consistent lender velocity, broad coverage of the lender universe will require more investment of time and attention.

About the Author
James Bardenwerper is a Director at Configure Partners, where he joined in 2018 as an Associate. Before joining Configure Partners, he was at Genuine Parts Company, supporting merger and acquisition efforts and strategic planning. He began his career as an Analyst at SunTrust Robinson Humphrey (now Truist Securities), where he spent three years advising clients on debt and equity capital raises across various industries.

James received a bachelor’s in finance from the University of Kentucky. He is a FINRA General Securities Registered Representative (Series 79, 63).

Footnotes:
1 – Ken Moelis, Unplugged in New York
2 – BlackRock to Acquire HPS Investment Partners to Deliver Integrated Solutions Across Public and Private Markets
3 – Citi and Apollo Announce $25 Billion Private Credit, Direct Lending Program
4 – Private Debt Investor Fundraising Report Q3 2024
5 – Pitchbook Q3 2024 US PE Breakdown, Configure Partners Private Credit Quarterly
6 – Onex Hands Control of Private Credit Unit Falcon Back to Its Managers

© 2025 Private Equity Professional | January 9, 2025

RWI usage is declining^[1] for deals closed in 2024, including among Private Equity buyers.^[2] When an M&A deal requires more carveouts for things like survival periods and caps and special escrows to cover RWI policy exclusions and limitations, deal makers are reevaluating the structure and cost of indemnification. Additionally, RWI may not provide a safety net expected by the sellers.

The Bottom Line
Deal parties have learned from the data that using RWI can add time and complexity to an M&A deal, both in negotiating the indemnification provisions and navigating post-closing indemnification claims. Every M&A deal is unique, and whether RWI is right for a transaction should be a case-by-case evaluation. Deal parties are now taking a closer look at whether RWI is best suited to meet their respective needs.

What the Data Says
Fewer deals today use RWI. After a high-water mark in 2021, a year when buyers often needed to find ways to sweeten their bids in a very competitive M&A landscape, RWI has been purchased on fewer deals each year. So far in 2024, RWI usage is down across all buyer types and deal sizes.^[2]

Not all M&A deals are a good candidate for RWI. RWI is more common on “cleaner” M&A exits, such as deals with higher values, a higher return-on-investment, longer exit timelines, fewer management carveouts, and “no survival” of the seller’s general reps & warranties.^[5]

Indemnification provisions between buyers and sellers are more carefully negotiated as buyers seek additional protections.

Deals with RWI are more likely to have special escrows^[3], typically to cover policy exclusions and caps. This data can be especially helpful when setting expectations with sellers during deal negotiations. Deals with RWI tend to have smaller escrows, and the median size of the general indemnification escrow is 0.5% of transaction value. However, when you factor in additional special escrows, and that buyers are successfully adding such escrows on nearly 50% of deals with RWI, the median aggregate amount escrowed on these deals is 2.5% of transaction value.^[4]

Last but not least, deals with RWI are more likely to have post-closing indemnification claims, especially because of the way these policies are structured: buyers (i.e. the insured) are motivated to burn through the retention (i.e. insurance deductible) quickly.^[6] When coverage under the policy does come into play, indemnification claims run through RWI take longer to resolve. Whereas about half of claims handled by RWI are resolved within 12 months, closer to three quarters are resolved within that time when handled by a professional shareholder representative.^[7]

Buyers are Reacting, Adapting
Smart and agile M&A deal parties evaluate market data, like that above, and stay ahead of emerging trends. In 2021, a record-setting year for M&A deal volume, buyers were often faced with expedited timelines and may not have been able to perform full due diligence. A few years later, deal parties are experiencing the effects of lax diligence (e.g., a huge increase in post-closing indemnification claims for breach of the “no undisclosed liabilities” seller representation ^[8]). Lessons were and continue to be learned.

Declining RWI usage indicates that the M&A market is still adapting, with deal parties carefully assessing the use of RWI on a case-by-case basis. 

With the pace of dealmaking significantly slower these past two years, buyers have taken advantage of the time to conduct more thorough due diligence, to which RWI underwriters are also privy. As a result, indemnification provisions between buyers and sellers are more carefully negotiated as buyers seek additional protections. RWI can sometimes provide coverage for the additional matters uncovered during due diligence, but not always. Sellers can find themselves agreeing to carveouts and special escrows for which they are still directly responsible in addition to the cost of RWI.

Private Equity Buyers and RWI
It is no secret that PE buyers are more likely to consider RWI when compared to other buyer types. Changes in RWI utilization, and related trends for deal terms relevant to RWI, are less dramatic year-over-year with PE buyers. It’s worth noting when there are shifts involving PE buyers.

For example, when strategic buyers were using RWI less and less in 2022 and 2023, PE buyers remained relatively consistent, with RWI identified on about 65% of deals. So far in 2024, however, RWI usage among PE buyers is down.^[2]

One thing is clear, deal parties are getting more efficient at identifying when RWI might work as intended and when it might not.

Interestingly, several M&A practitioners have recently mentioned cases where PE buyers negotiate the deal as if there will be RWI, but at closing the PE buyer elects to skip the premium cost to purchase the policy and instead essentially decides to self-insure. (i.e., carefully evaluating the structure and cost of indemnification).

Going Forward
Declining RWI usage indicates that the M&A market is still adapting, with deal parties carefully assessing the use of RWI on a case-by-case basis. Lessons emphasizing the importance of due diligence suggest that buyers will maintain thorough diligence practices, even as market activity increases. Meanwhile, indemnification provisions are expected to remain a focal point of negotiation

As we begin to see more deal activity in the latter part of 2024 and into 2025, especially from PE buyers and sellers, it will be even more important to keep an eye on these RWI trends. The market is adapting and adjusting as more information and data about RWI becomes available. One thing is clear, deal parties are getting more efficient at identifying when RWI might work as intended on their M&A deal and, perhaps more importantly, when it might not.

About the Author
Kip Wallen is a senior director leading the SRS Acquiom thought leadership practice. He leverages his extensive expertise and SRS Acquiom proprietary data to produce resourceful content regularly utilized by market practitioners. Kip has broad experience in M&A and provides guidance on market standards and trends.

Previously, Kip was a Director with the SRS Acquiom Transactional Group, where he collaborated with clients and counsel to negotiate M&A documents including purchase, escrow, payments, and other transactional agreements. Before joining SRS Acquiom, Kip was an attorney with a Denver-based boutique business law firm where he assisted clients with M&A transactions as well as general corporate governance and securities matters.

Kip is an avid supporter of the Colorado Symphony, serving on the Associate Board and Colorado Symphony Fund Board, and the Colorado Rockies. He is an active participant on the American Bar Association’s M&A Committee. In 2016, Kip completed Leadership 20 with the Denver chapter of the Association for Corporate Growth.

Kip received his J.D. from the Sturm College of Law at the University of Denver and an M.S. in Economics, B.S. in Economics and B.A. in International Relations from Lehigh University. He is a member of the Colorado bar.

Footnotes:
^[1] Source: 2024 RWI Highlights: Effect of Reps and Warranties Insurance on M&A Deal Terms (“SRSA RWI Highlights”).
^[2] Source: 120+ deals closed in 2024 on which SRS Acquiom serves as the Shareholder Representative. Some 2024 data is available at SRS Acquiom MarketStandard^TM
[3] Source: SRSA RWI Highlights.
^[4] Source: SRSA RWI Highlights.
^[5] Source: SRSA RWI Highlights.
^[6] Source: 2024 SRS Acquiom M&A Claims Insights Report.
^[7] Source: SRSA RWI Highlights (including data from the presentation “Aon R&W Insurance Claims”).
^[8] Source: 2024 SRSA M&A Claims Insights Report.

© 2024 Private Equity Professional | December 20, 2024

The latest survey from Grant Thornton reveals that private equity professionals are forecasting a rise in transaction volume, despite the uncertainty surrounding the upcoming U.S. presidential election.

The survey, which polled 255 M&A professionals, found that 67% of respondents anticipate increased deal volume over the next six months. Despite high interest rates, M&A professionals cited several factors contributing to stronger deal activity in the latter half of the year.

Respondents pointed to a demand for technological advancements as a driver for deals. Sixty percent identified technology, media, entertainment, and telecommunications as key sectors for M&A activity in the coming six months. Healthcare and energy followed, ranking second and third with 34% and 31% of respondents, respectively.

Private equity (PE) firms also indicated plans to participate. Many PE firms have been holding cash, waiting for better opportunities. However, some firms may soon face pressure to return capital to investors if they do not deploy funds. Additionally, firms that have held portfolio companies for extended periods are feeling the need to sell to provide returns to investors.

Although 77% of PE respondents were optimistic about the performance of their portfolio companies over the next 12 months, 54% of PE and corporate respondents admitted to holding assets for longer periods than usual.

Vic Sandhu, a managing director at Grant Thornton, noted that investors can become restless when assets are held for longer durations. “Buyers are going to find opportunities where valuations are slightly depressed in some subsectors, while others may see valuation increases,” said Mr. Sandhu. “This reflects productivity changes and growth in certain sectors.”

However, the survey also highlighted continued challenges in securing financing.

Financing Remains Uncertain
High interest rates have created turbulence in the M&A landscape. Constraints in the lending environment have led respondents to close fewer deals, increase the equity portion in financings, and explore alternative financing structures.

Among those exploring new avenues, 85% are considering preferred equity and debt structures, while 55% are turning to investments from specialized private funds.

Tom Libeg, principal at Grant Thornton, observed that bankers are spending more time developing creative financing solutions. “I’ve seen more deals where firms collaborate and explore alternative structures to close transactions,” said Mr. Libeg. “Later, they may consider different recapitalization options.”

Interestingly, M&A professionals remain divided over whether lending conditions will improve. While interest rates are expected to drop, 34% of respondents predict a more constrained lending environment over the next 12 months, while 40% expect fewer constraints.

According to Mr. Sandhu, transaction volumes will rise sharply if interest rates decline significantly. If not, M&A activity will likely see a slower, long-term recovery.

“When buyers identify premium assets, they move quickly to involve service providers and differentiate their bids by offering speed and certainty in closing,” said Kosta Kourakis, a principal at Grant Thornton. “As the market heats up and more deals arise, the ability to act swiftly will become a key differentiator.”

Caution Surrounding the Election
While many M&A professionals are confident that deal volume will rise over the next six months, 40% indicated pausing deals until after the U.S. presidential election in November.

Roughly half of respondents said the election would not impact their deal-making, while 10% reported accelerating M&A processes to close deals before the election.

According to Sandhu, buy-side and sell-side professionals in industries vulnerable to regulation and market uncertainty tend to hold off on deals until after the election. “If businesses cannot withstand economic disruptions, it makes sense to pause deals until after the election,” said Mr. Sandhu. “A clearer political landscape can lead to more informed decisions, potentially resulting in better deal outcomes.”

Respondents ranked four factors regarding how they might be affected by the election. Nearly half (49%) said the election’s impact on the overall economy would have the greatest influence on M&A activity. Twenty-five percent highlighted regulatory policy, while 21% pointed to tax policy. The impact of trade policy was ranked as less critical.

The survey was conducted in July, before Joe Biden withdrew from the presidential race, and Kamala Harris became the presumptive Democratic nominee against Republican Donald Trump.

Founded in Chicago in 1924, Grant Thornton is the U.S. member firm of Grant Thornton International, one of the world’s largest audit, tax, and advisory firms. The firm generates over $2.4 billion in revenue and operates over 50 offices with over 600 partners and 9,000 employees.

To view the full results of the Grant Thornton survey, click HERE.

© 2024 Private Equity Professional | September 17, 2024

According to Bain & Company’s 2024 Private Equity Midyear Report, the two-year long slump in global private equity looks finally to be bottoming out with the industry finding a footing from which to climb back.

But while private equity activity appears to have arrested its freefall, Bain cautions that it remains subdued by historical standards – especially relative to a $3.9 trillion mountain of available dry powder ($1.1 trillion of this committed but uncalled capital in buyout funds).

Prospects for revival remain tentative with momentum still scarce. Among positive signals for prospects, the private equity industry’s precipitous slide in both deal-making and exits over the past two years largely levelled off in the first months of 2024.

Globally, private equity’s buyout transaction count through May 15 was down 4% on an annualized basis versus 2023, putting it on track to finish the year broadly flat compared with last year’s tally. Buyout transaction’s global value is on track to finish the year at $521 billion, up 18% from 2023’s $442 billion – but with the rise driven by a higher average deal size – $916 million, up from $758 million – rather than more deals.

Private equity is at an important turning point with dealmaking and activity now picking up.

Private equity exits also looked to have halted the steep declines of the past two years. The total number of buyout-backed exits is tracking flat on an annualized basis, while exit values are trending to finish 2024 at $361 billion, registering a 17% rise from 2023 – but still leaving this year shaping up as the second worst for private equity exit values since 2016.

In a further indication of steadily reviving optimism over the outlook, Bain also reports that informal discussions with general partners (GPs) globally suggest that deal pipelines are already beginning to refill, with many sighting “green shoots” of a recovery emerging. GPs’ latest observations are more upbeat than in Bain’s most recent March survey of 1,400 private equity market participants which found that 30% did not expect a dealmaking resurgence until Q4 of this year, with close to 40% expecting that to take until 2025 or beyond.

Yet while Bain’s report notes that 2024’s final tally of transaction value will likely approach that of the buoyant years before an anomalous post-pandemic spike in 2021, it suggests that it is too soon to assume a “return to normal”, with a sustained upswing in activity, given the series of key challenges that confront the private equity.

“With the year having got off to a better start we’ve been cautiously optimistic about 2024’s outlook. We’re seeing that validated with the data that’s coming through, as well as other indicators, showing that PE is at an important turning point with dealmaking and activity now picking up. So, we see better prospects emerging,” said Rebecca Burack, the global head of Bain’s private equity practice. “But the challenges facing the industry, for example around interest rates, value creation, and especially the exit logjam and the need to respond to pressure to get capital back to limited partners (LPs), mean this year will also be an important inflection point in other ways, too, as GPs look to get the wheel spinning once again.”

Adjusting to the ‘new normal’ imperative amid higher rates and an array of challenges
Bain’s Private Equity Midyear Report maps out an array of critical challenges that private equity firms are under pressure to address urgently, from prolonged uncertainty over the macro-economy and interest rates that look set to stay higher for longer, to continuing geopolitical turbulence, to the sector’s exits gridlock. Bain urges that private equity firms need to move quickly and decisively to adapt to a changed market – rather than expect a rapid resumption of business as usual, as seen before the market slowdown over the previous two years.

“The imperative is to adjust to the ‘new normal’,” said Hugh MacArthur, the chairman of the global private equity practice at Bain. “It typically takes 12 months or more for a boost in exits to produce a turnaround in fund-raising – so even if dealmaking picks up this year it could take until 2026 before the fundraising environment really improves. So, in a hotly competitive market for capital, private equity firms need to make decisive moves to change the narrative. They need to use this time to take a clear look in the mirror and understand how limited partners really see their fund and then to translate those insights into stronger performance and more competitive positioning. Importantly, that includes sharpening value creation – in an environment of higher rates the premium is going to be on producing margin and revenue growth in portfolio businesses.”

Exits gridlock persists, multiplying pressure to return more cash to LPs and hampering fund-raising
The continuing deep freeze afflicting private equity exits is a critical area of pressure highlighted in the report. It finds that the continued low level of exits, leaving private equity firms sitting on trillions in unsold and aging assets, is making life increasingly uncomfortable for GPs in multiple ways.

Crucially, Bain notes that the prolonged slump in exits is preventing the return of capital to LPs that are increasingly pressing for a rise in current low levels of distributed-to-paid-in capital (DPI). In turn, LPs’ dissatisfaction over distributions is impeding new fund-raising with investors focusing new commitments on a narrower swath of favored funds. A recent poll by the Institutional Limited Partners Association showed only a small minority of LPs were satisfied by the urgency GPs are placing on increasing liquidity.

One brighter spot for exit prospects is a reopening of the initial public offering market.

The impact on fund-raising means that the environment for private equity to secure new capital remains a tale of haves and have-nots. Through May 15, private equity has raised $422 billion in capital versus $438 billion over the same period last year. The trend suggests fundraising will reach an annualized $1.1 trillion in 2024 – marking a 15% drop from the previous year. Buyout funds are dominating the fund-raising landscape, with $199 billion raised up to May 15, and the category set to reach a tally of $531 billion by year-end, a 6% rise from 2023’s total.

Bain highlights that while the overall fund-raising figures look relatively robust, LPs’ increasing focus on a narrowing swath of favored fund managers means that in buyouts the 10 largest funds closed took in some 64% of total capital raised so far this year, with the largest single fund – the $24 billion EQT X fund- accounting for 12%. As a result, the bulk of buyout funds are left to battle over the remaining 36% of capital available and at least one in five buyout funds is closing under its target.

One brighter spot for exit prospects is a reopening of the initial public offering market, sparked by a surge in public equities over the past six months that has also relieved some liquidity pressures on LPs, today’s report notes. But while a revived IPO market has produced several large exits in Europe, the report adds that IPO exit channel still represents only a sliver of exit totals, with the corporate deals and sponsor-to-sponsor exit channels still largely flat.

Persistent macro nerves and rate-related operational challenges keeping dealmakers cautious
Persistent macro-economic and geopolitical uncertainties, with still-elevated global interest rates that may not be lowered as much as expected this year, also remain a persistent drag on private equity’s revival prospects. Bain notes that still-elevated rates are keeping dealmakers cautious, distracted, and wary on either side of transactions – while also aggravating the challenge of managing rate-related issues within existing portfolios.

Interest rates that have stayed higher for longer have also raised the stakes for funds in holding assets over longer periods in the face of the declining exits. Balance sheets have come under pressure from the increased cost of debt financed by adjustable-rate loans so that portfolio managers are spending increasing time in negotiation with lenders and managing operational issues, with this then acting as a brake on new dealmaking activity.

Against this backdrop, and with a full-blown revival in fundraising and overall private equity activity likely to take a number of months to come through, Bain’s analysis advocates for firms to implement determined action to fully understand their LP investors’ expectations and needs – and to develop a comprehensive plan across their portfolios to meet those requirements and deliver value.

For a copy of Bain’s 2024 Private Equity Midyear Report click HERE.

Bain & Company, a global business consulting firm, serves clients on issues of strategy, operations, technology, organization and mergers and acquisitions. The firm has 65 offices in 40 countries  and is headquartered in Boston.

© 2024 Private Equity Professional | June 4, 2024