Deal Volume Perspectives on a slower era in private markets
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Mar 26, 2024 Fredrik Dahlqvist and David Quigley, senior partners at McKinsey, discuss private markets trends and challenges. They explore allocation strategies, tech adoption, and value creation in private equity. The guests emphasize the importance of data, technology, and talent in driving performance and generating value in assets.
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Denominator Effect Dominates 2023
- The 2023 private market story centers around the denominator effect's impact.
- Higher interest rates, lower valuations, and decreased deal volume led to fewer LP distributions.
Fundraising Concentration
- Fundraising concentrated among larger managers in 2023, with 41% of dollars going to the top 25.
- This trend, while amplified, isn't new, echoing patterns seen after the dot-com burst and during the GFC.
Buyout and VC Divergence
- Buyouts and venture capital diverged in 2023.
- Buyouts saw record fundraising, while VC fundraising plummeted; buyouts delivered returns, while VC experienced losses.