The tide has turned for the private equity industry, now on the cusp of major consolidation.
Rising interest rates ended the blessed period of near-free money that has boosted funds investing in unlisted companies in recent years.
For nearly a year, headwinds have been blowing over their heads: banks are reluctant to finance leveraged transactions (LBOs) and fundraising has dried up since the summer.
In the first quarter, globally, 151 private equity firms raised funds, compared to 276 a year earlier and 393 in 2021 (189 billion dollars), notes the research firm Preqin.
Institutional investors (insurers, pension funds, sovereign wealth funds, etc.) who for years have favored private equity with attractive returns (more than 10% on average) have become rare.
This change of footing is linked to economic uncertainties and…
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