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25 Private Equity Statistics to Prepare You for 2023

25 PE stats and global M&A trends that highlight current state of the industry

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November 23, 2022

As the end of the year draws ever closer, dealmakers' eyes are not only set on finishing the year strong but also looking to what 2023 may bring. In the face of economic uncertainty "and all the challenges a potential recession represents "we've collected 25 private equity statistics and global M&A trends that help highlight the current state of the industry and give us hints about where it's headed.

After a Red-Hot 2021, 2022 Deal Value and Volume Cooled

  1. There were over 63,000 deals in 2021
  2. resulting in $5.9 trillion in global M&A activity.
  3. By the end of 2021, firms had amassed a record-setting $3.4 trillion in dry powder globally
  4. and a full $1 trillion was just sitting in buyout funds, burning a rather large hold in firms' pockets.
  5. However, McKinsey reports that early this year, large deals (worth $25+ million) fell 24% from last year.
  6. On top of that, M&A aggregate deal value has fallen by 20%, according to Bain.
  7. PwC reported that deal volumes and values are down 12% and 33%, respectively, as countries face higher energy costs and lower investor confidence.
  8. They further stated that volume and value declines in the Americas, 18% & 22%, respectively, were primarily due to inflation and rising interest rates.

Some Industries Are Faring Better Than Others

  1. According to McKinsey, over half of total fundraising last year went to firms with formal environmental, social, and governance (ESG) policies.
  2. Further cementing PE's focus on ESG, JP Morgan found that 82% of board directors consider ESG a value driver.
  3. White & Case did a deep dive on M&A activity by industry, revealing the largest number of deals in 2021 were in technology (over 2,000), a 69% increase versus the previous year.
  4. They also found technology deal value rose a staggering 133%, reaching $790 billion.
  5. Industrials and chemicals came in second, with a $299 billion total deal value, increasing 111% year-over-year.
  6. Rounding out the top three was the pharma, medical, and biotechnology sector with a 38% increase in deal value to $289 billion, while volume was up 25% over 2020.

PE Is Still a Growing Industry

  1. Despite a downturn, Deloitte's "most likely" forecast predicts global PE assets under management (AUM) will reach $5.8 trillion by 2025.
  2. Employment is also on the rise. Ibis World reported an average increase of 6.7% in US private equity employees from 2017 to 2022.
  3. In fact, research shows that private equity IRR is highest in the years following economic downturns.
  4. In August, Grant Thornton reported 72% of M&A professionals say they expect deal volume to increase in the next six months "up from 48% in April and 68% last October.
  5. More than half (55%) of Grant Thornton's survey respondents say that if interest rates are going to increase further, they expect deals to accelerate so they can be completed before further rises in rates take effect.

Data Provides Stability for an Uncertain 2023

  1. With deal volume slowing and a recession looming, 66% of dealmakers feel increased pressure to source deals directly.
  2. Research shows that data- and technology-savvy firms transact 3.5x more frequently and generate 8.8 percentage points higher IRR than their less digitally mature peers.
  3. Despite this, 41% of private equity firms are only "somewhat strategic," using data to only answer "basic questions periodically."
  4. 78% of dealmakers believe that using data to find and close deals will become more important in the next 6-12 months
  5. and the number #1 they need to succeed is more robust profiles for private, bootstrapped businesses.
  6. 83% of Sourcescrub customers cite "accurately classified bootstrapped companies" as their favorite platform feature.

But Wait, There's More!

Want more private equity statistics and global M&A trends? Download our Dealmakers and the Future of Data guide to see results from our survey of nearly 100 dealmakers about how they view the landscape and their plans for the future.