2023 Review – Inflation, consolidation and re-evaluation

As a tough year for the European private equity (PE) draws to an
end, Mergermarket’s private funds editorial team gives a market
overview and highlights key topics including the resilience of
the mid-market, consolidation in the advisor space, and the
popularity of co-investments.


The last 12 months brought with them the collapse of Credit
Suisse and Silicon Valley Bank; a return to higher interest
rates; and yet more geopolitical uncertainty and conflict.


Although private equity activity has remained subdued this year,
particularly versus the highs of 2021 and 2022, the industry has
continued to innovate and adapt, looking for ways to get deals
done and maintain liquidity.


Consolidation remains an ongoing theme in the private equity
industry – not only via value creation through buy-and-build, but
in the form of asset managers acquiring specialised and
mid-market firms. The mid-market has seen consistent dealflow and
exits against a tough backdrop, leading larger sponsors to
re-enter the mid-market so as not to miss out.


The PE advisory industry has also been busy consolidating amid a
drop in dealflow and therefore a drop in fees, with more
consolidation on the cards for 2024 as advisers look to gain
market share and add new capabilities to their roster.


Structuring deals in 2023 has been challenging in a higher cost
of capital environment, leading GPs to explore options including
adding more equity into deals in the form of co-investments.
These deals also have benefits to LPs including
relationship-building and an opportunity to gain in-depth
insights on how their GPs operate.


0:55 – Market overview


2:20 – Mid-market outlook with Rachel Lewis


11:48 – PE advisory consolidation with Min Ho


17:51 – Co-investment perspectives with Ero Partsakoulaki


You can listen to the podcast on your favourite podcasting
platforms, including Spotify and Apple Podcasts.


If you would like to hear more podcasts produced by ION
Analytics, you can access the ION Analytics channel on Apple
Podcasts.


Theme music: 2012 Kick Up The Fire


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