$1B-plus private equity deals head toward lowest year since 2019

Global private equity and venture capital deals with an announced value of more than $1 billion are on track for the slowest year since 2019, with $99.47 billion across 33 deals reported for the year to July 13, according to S&P Global Market Intelligence data.

Big ticket deals have been impacted by factors including a substantially slower syndicated loan market and the low number of overall exits.

"One of the biggest challenges there is just the syndicated loan market is down substantially," said Brenda Rainey, a leader in Bain & Co.'s private equity practice. "It's around 60% in volume this year versus last year. Private debt has certainly stepped in to fill some of that void, but there's a limit to the size of transactions that they can support individually."

The aggregate value for deals larger than $1 billion was down 62.4% year over year in the second quarter to $37.34 billion.

Exit slowdown

Another factor is that deals that tend to be large in size — sponsor to sponsor and public to private — are down in line with the overall slowing of exits, in part due to a continuing price expectations gap between buyers and sellers.

"2023 is tracking to be down in exit value by more than half versus last year," Rainey said.

Exits grease the private equity machine by providing distributions to limited partners, who are then freed up to invest capital in the next set of funds, which then invest in more companies.

"All of that cycle of capital right now is a bit stuck," Rainey said. "And so the real question is how will that change? And we're all watching and waiting for the second half of this year to see if the deal markets come back."

– Download a spreadsheet with data featured in this story. – Check out the global pension fund investments in Q2 2023. – Explore more private equity coverage.

TMT leads sectors

The technology, media and telecommunications sector was the most attractive sector for private equity and venture capital, investing in eight deals with a total value of $27.39 billion year to date.

The financials and industrials sectors followed with $26.31 billion and $12.85 billion, respectively.

Top transactions

GTCR LLC's agreement to acquire online payments platform WorldPay (UK) Ltd. from Fidelity National Information Services Inc. for $12.70 billion was the largest private equity deal of the year through July 13.

The second-biggest transaction was Silver Lake Technology Management LLC and Canada Pension Plan Investment Board's $10.45 billion acquisition of the remaining 95.9% stake in experience management platform Qualtrics International Inc.

Apollo Global Management Inc. and Abu Dhabi Investment Authority teamed up to acquire Univar Solutions Inc. for $8.16 billion in the year's third-largest deal.