Despite global dealmaking remaining flat in the first half of 2024, there was an increase in deal values during the second quarter, driven largely by larger transactions in Europe, according to an investment outlook.
According to private equity investing platform Moonfare’s mid-year review of the private equity industry for the first half of 2024, this improvement followws a sluggish start, with global private equity deal value reaching $620.6 billion, an 8.5% decrease from the first half of 2023. However, the volume of deals saw a sharper decline, with around 7,000 transactions recorded, down 18.3% year-on-year.
Fundraising has shown resilience, with global private equity fundraising reaching $293 billion across 243 funds in the first half of 2024. This pace suggested that the annualised total for the year could match 2022’s impressive $586 billion. European fundraising has been particularly strong, tracking 42% higher than 2023 levels, despite initial expectations of a slowdown. According to the outlook, this performance is driven by the concentration of capital in a few mega funds, with 61% of the capital raised in the region coming from just three funds: EQT Fund X, the Eighth Cinven Fund, and Apax Fund XI, which raised €22 billion, €13 billion, and €11 billion, respectively.
Private equity investors maintain appetite for asset class
The exit markets have also shown signs of recovery, particularly in the second quarter. Global divestment value reached $309.6 billion across 1,130 transactions in the first half, a 10.5% decrease in value and a 29.6% drop in volume compared to H1 2023. However, Q2 saw an increase in global exit value by 26%, reaching $172 billion, driven by larger sales despite a decrease in volume. Europe saw a surge in exit value, increasing by 90% in Q2 to €72.8 billion. The return of private equity-backed IPOs is a promising development, with $15 billion raised so far this year, more than double the amount in the first half of 2023.
According to the secondary market has also been robust, providing crucial liquidity. The estimated deal volumes surpassed $72 billion in the first six months, a record first half for the industry, according to Evercore’s report. This marks an increase compared to H1 2023, which saw a total transaction value of $42 billion. The report suggests that the second halves of the year are typically more active, indicating that 2024 could surpass the record volumes of 2022.
According to the outlook, stable economic conditions in the US and Europe, strong performance of recent listings, and a backlog of mature portfolio companies suggest sustained momentum in exits.
