Dry Powder: The Private Equity Podcast Tech Sector Update: Waiting for a Recovery
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Dec 17, 2024 Chris Perry, Co-lead of Bain's private equity TMT practice, shares his insights on the tech sector's recovery and the impact of AI. He discusses the cautious optimism surrounding recent big-ticket deals and ongoing valuation challenges. The conversation dives into the complexities sellers face in asset sales, balancing profitability with growth, and the strategic mindset needed for success. Perry emphasizes the dual role of AI as both a challenge and an opportunity, urging tech investors to adapt and innovate to stay competitive in this evolving landscape.
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Tech Sector Recovery
- Tech sector recovery shows moderate signs with deal volume exceeding 2023.
- Q2 2024 had the highest deal activity in two years, but transactions were small.
Deal-Making Predictions
- GPs at conferences initially predicted a return to rapid deal-making by the end of 2024.
- That prediction has shifted to 2025 as the year progresses.
De-Risking Asset Sales
- To de-risk selling assets, quietly talk to potential buyers, including strategics, tech strategics, and other sponsors.
- This helps gauge interest and potential valuation without publicly tainting the asset.