Inside the Strategy Room

241. The path forward for private equity

34 snips
Mar 6, 2025
In this enlightening discussion, Alex Edlich, a senior partner at McKinsey specializing in private equity, and Christopher Croke, a partner leading the Private Capital Practice in London, unpack the latest trends in the private equity landscape. They highlight a rebound in dealmaking and strategies for value creation amid changing market dynamics and rising interest rates. The duo also explores the resilience of mid-market funds, innovative investment strategies, and the shifts in industry metrics, emphasizing a cautious but optimistic outlook for 2024.
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INSIGHT

PE Rebounding

  • Private equity emerged from a challenging period in 2024, showing resilience and innovation.
  • Dealmaking rebounded, especially for larger buyouts, but fundraising remained challenging and returns muted.
INSIGHT

Dealmaking Trends

  • 2024 saw a 14% increase in PE deal value, the third most active year on record, driven by larger buyouts.
  • While deal count dropped, larger deals (over $500M) saw a 26% increase in value, indicating industry health.
INSIGHT

Large Deal Impact

  • Larger sponsors' willingness to do deals over $500M has a ripple effect throughout the industry.
  • It suggests higher sponsor-to-sponsor transaction feasibility in the future.
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