2024年全球私募股权投资报告-英文版

PrivateEquityOutlook2024:TheLiquidityImperativeSpikinginterestratesderaileddealmakingin2023andleftthecapitalꢁlywheelsputteringꢀGettingunstuckisjoboneintheyearaheadꢀBy

Hugh

MacArthur,

Rebecca

Burack,

Graham

Rose,

Christophe

De

Vusser,

Kiki

Yang,and

Sebastien

LamyAt

a

GlancePrivateequitycontinuedtoreelin2023asrapidlyrisinginterestratesledtosharpdeclinesindealmaking,exits,andfund-raisingꢀTheexitconundrumhasemergedasthemostpressingproblem,asLPsstarvedfor

distributionspullbacknewallocationsfromallbutthelargest,mostreliablefundsꢀThelong-termoutlookremains

sound,butbreaking

thelogjamwillrequire

more

robust

approachestovaluecreationandrapidinnovationinliquiditysolutionsꢀIt’s

safetosay

theprivateequityindustryhasneverseenanythingquitelikewhat’shappenedoverthelast24months.Whilethesharpdrop-offindealactivityinlate2022andinto2023echoestheperiodfollowingthe2008–09

globalfinancialcrisis(GFC),thesituationtheindustry

faces

todayislargelyunprecedented.ThenumbersareallveryGFC-like:Dealvalueanddealcounthave

fallen60%and35%,respectively,fromtheirpeaks

in2021.Exit

valueisdown

66%,andthenumber

offundsclosing

isoffbynearly55%3GlobalPrivateEquityReport2024(see

Figure

1).Yet

what’sdrivingthesedeclinescouldn’tbemoredissimilartowhatwashappeningin2008–09,andmakingsenseofitrequiresadifferentlensaltogether.As

difficultasitwas,theaftermathoftheGFCfollowedapredictablepattern:To

copewiththecrisis,centralbankers

slashed

interest

ratesto

spuractivity,

theeconomy

slowlystabilized,

andprivateequitywasabletoclawitsway

backfromwhatmanypredictedwouldbe

itsunraveling.Theresultingperiodofgrowthintheyearsthatfollowedcreatedaprivateequityindustrythatisvastlylargerandmorecomplexthananyonein2008couldhave

reasonablyexpected.Yet

today

thatsizeandcomplexitymagnifythechallengestheindustry

faces.

Businessconditionsare

moreperplexingthanpredictable.Interestrateshaverisen

fasterthanatanytimesincethe1980s,anditremainsunclearwhentheUS

FederalReserve

willreversecourse

orwhererateswilleventuallysettle

(see

Figure

2).

Concerns

aboutwhatwe

dubbed

lastyear

“themostanticipatedrecessioninhistory

thathasn’thappened

yet”continueto

linger.

Yet

tothesurpriseofmost

analysts,theeconomyischuggingalongnicely.Record-lowunemployment,reasonablegrowth,andsurgingpublicmarketsintheUS

suggest

thepossibility

thatwe

mightjust

escape

these

monthsofturmoilwithnothingworsethanasoftlanding.These

crossed

signalshaveleftprivateequityhamstrung.Thesheervelocityoftheinterestrateshockwassomething

fewintheindustry

hadeverexperienced,

andtheimpact

onvaluehasdrivena

wedgebetweenbuyersandsellers.Figure

1a:

Investments,exits,andthenumberofbuyoutfundsclosedallcontinuedtoslidein2023astheindustryreeledfromrisinginterestratesInvestmentsExitsFund-raisingGlobal

buyout

deal

valueGlobal

buyout-backed

exit

valueGlobal

buyout

capital

raisedDealcount4,000ExitcountCountoffundsclosed(–60%)(–66%)(–1%)$1,250B1,000750$1,250B3,000$600B40020001,00080060040020001,00075050025003,0002,0001,00002,0005002501,00000201320182023201320182023201320182023Notes:Investments—excludesadd-ons;excludesloan-to-owntransactionsandacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;Exits—includesfullandpartialexits;bankruptciesexcluded;IPOvaluerepresentsofferamountandnotmarketvalueofcompany;Fund-raising—datagroupedbytheyearinwhichfundsheldtheir­inalclose;countisofallfunds,includingthoseforwhich­inalclosedataisunavailable;buyoutcategoryincludesbuyout,balanced,coinvestment,andcoinvestmentmultimanagerfunds;excludesSoftBankVisionFundSources:Dealogic;Preqin4GlobalPrivateEquityReport2024Figure

1b:

Activity

duringthesecondhalfoftheyear

was

animprovement

ontheꢀirst,

butnotby

muchInvestmentsExitsFund-raisingGlobal

buyout

deal

value,

quarterlyGlobal

buyout-backed

exit

value,quarterlyGlobal

buyout

capital

raised,quarterlyDealcountExitcountCountoffundsclosed$350B300250200150100501,0008006004002000$350B300250200150100506004002000$200B1501005040030020010000002020

2021

2022

20232020

2021

2022

20232020

2021

2022

2023Notes:Investments—excludesadd-ons;excludesloan-to-owntransactionsandacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;Exits—includesfullandpartialexits;bankruptciesexcluded;IPOvaluerepresentsofferamountandnotmarketvalueofcompany;Fund-raising—datagroupedbytheyearinwhichfundsheldtheir­inalclose;countisofallfunds,includingthoseforwhich­inalclosedataisunavailable;buyoutcategoryincludesbuyout,balanced,coinvestment,andcoinvestmentmultimanagerfunds;excludesSoftBankVisionFundSources:Dealogic;PreqinFigure

2:

The525-basis-pointriseininterestratesfromMarch2022toJuly2023wasthesharpestmonetarytighteningindecadesCentral

bank

interest

rates

byregion

(monthly

average)+113

basis

+289

bpspointsin

US+98

bps+25

bps6%4USUKEurope20Jan2020Jul2020Jan2021Jul2021Jan2022Jul2022Jan2023Jul2023Notes:USshowsfederalfundsrate;Europeshowseuroshort-termreporate;UKshowsclearingbanksbaserate(middlerate);basispointchangesoverasix-monthperiodaredisplayedfortheUSonlyandcalculatedbasedontheincreaseinaverageinterestratesbetweentheendofJuneandDecemberofeachyearSource:LSEG5GlobalPrivateEquityReport2024Pricemultiples,whichtendtomoveinverselytointerestrates,have

tippeddownwardoverthelastyear,

butonlyslightlysofar.

That’s

becausesellersarebringingtomarketonlythehighest-qualityassets,thosetheyareconfidentwillmoveatareasonablereturn.Otherwise,theexitchannelshavelargelydriedup,

leavinggeneralpartners(GPs)withatowering$3.2trillioninunsoldassetsandstanchingtheflowofcapitalbacktolimitedpartners(LPs).These

declines

inactivityhavehada

chillingeffect

onfund-raising.SlowerdistributionshaveleftLPscashflownegative,crimpingtheirabilitytoplowmorecapitalbackintoprivateequity.

Theindustrystillraisedanimpressive$1.2trillioninfreshcapitalin2023,andthebuyoutcategoryattracted$448billion.ButLPs

werehighlyselective.Whilecapitalflowed

tothelargest“reliablehand”buyoutfunds,fund-raisingformostwasashardasit’s

everbeen.Slower

distributionshave

left

LPs

cashꢀlow

negative,

crimpingtheirabilitytoplowmore

capitalbackintoprivateequity.Until

GPs

canbegin

moving

assets

outoftheirportfolios

ina

timely

fashion,raisingthenextfundwon’tget

any

easier.Andthethreattoreturnsisreal.Buyoutstypicallyinvolve

termloansthatexpireinfivetosevenyears.Already,interestcoverageratiosamongbuyout-backedportfoliocompaniesintheUShave

droppedto2.4

timesearningsbeforeinterest,taxes,depreciation,andamortization(EBITDA),thelowestlevelsince2007.

ThatispressuringGPstobothfindliquiditysolutionsanddevisenewways

to

generateprofitsthroughoperatingleverage—notjustthemultipleexpansionandrevenuegrowththeindustryhasleanedonforyears.Early

signs

of

a

turnaround?

Themostdifficultaspectofthisgridlock,ofcourse,ispredictingwhatwillhappennext.Butinourview,

thegreenshoots

ofa

recoveryarestartingtopokethrough.Perhapsthemostimportantisthat,barringanynewmacroshocksorgeopoliticalcrises,ratesaremorelikelythannottomoderateinthecomingyear.Evenslightcutsarelikelytospurondealmakingaslongasthemacrooutlookremainsrelativelystable.Buyoutfundsalonearesittingonarecord$1.2trillionindrypowder,and26%ofthatisfouryearsoldorolder,upfrom22%in2022

(see

Figure

3).ThatcreatesaheavierincentivethannormalforGPstogetoffthesidelinesandstartbuying,evenifconditionsaren’tideal.Activityisalreadytickingupward,andwithhelpfromtheFedandtheEuropeanCentralBank,

thebiasin2024islikelytotheupsidewhenitcomestodealcountandvalue.Exitsareanothermatter.Barringasharper-than-anticipateddropinrates,sellerswillcontinuetofacehighhurdlestounloadingcompaniestostrategicbuyers,othersponsors,orthepublicmarkets.6GlobalPrivateEquityReport2024Figure

3:Witha

record

26%ofglobalbuyoutdry

powder

now

four

yearsoldorolder,

generalpartnersareundergrowing

pressuretododealsGlobal

buyout

dry

powder,

byyears

since

capital

raised

($T)1.21.01.00.90.80.73

yearsorless$0.7T4–5yearsMorethan5

years2017191819191820192122222326Shareofcapitalthatisatleast4

yearsold(%)23Notes:Buyoutcategoryincludesbuyout,balanced,coinvestment,andcoinvestmentmultimanagerfunds;assumesaverageinvestmentperiodofꢀiveyears;percentagesplitofcapitalraisedin2023isasofQ2;discrepanciesinbarheightsdisplayingthesamevalueareduetoroundingdifferencesSources:Preqin;BainanalysisWithsponsorsstrugglingtosendcashbacktotheirLPs,2024willlikelybe

definedbyhowcreativetheindustrycanbeinfindingways

togenerateliquidity.Action

required.

What’sclear

isthatpassively

waitingforconditionsto

recoverisnot

a

viablestrategy.Muchofthisreportisdevotedtoexploringhowthesedynamicsareplayingoutandwhatthemostforward-thinkingGPs

are

working

on.Getting

unstuck

willdemandaction

inseveraldirections

atonce:•Doubling

down

on

value

creation.

Theexitsituationisshiningabrightlightonhowcriticalitistogenerateoperatingleverageinamarketwheretailwindsfrommultipleexpansionhave

turnedintoheadwinds.You

can’tcontrolthedirectionofrates.Butyoucangetbetteratunderwritingvalueandcapturingitthroughcrispexecution.We’ve

talkedaboutitforyears:Theindustryhasrelieddisproportionatelyonrisingmultiplesandrevenuegainstogeneratereturnswhilemarginimprovementhascontributedpracticallynothing.Thatnolongerworkswhenrisingratesserveasballastforassetmultiples.Theportfoliocompaniesthatwillstandoutinthisdifficultmarketarethosethathave

usedeverymeanspossibleto

boostEBITDA

efficientlyandcandemonstrateto

thenextownerthatthere’s

moneyleftonthetable.Thatmeansfundshave

to

getsharperatfindingandpullingthevalue-creation“levers”thatgenerateorganicgrowth—pricing,salesforceeffectiveness,and7GlobalPrivateEquityReport2024product

innovation,

to

namea

few.

Ifthese

insights

weren’t

part

oftheoriginalvalue-creation

plan,nowisthetimetofocusonthem.Themarkethasbeenabundantlyclearonthis.Thecompaniesthataresellingarenotthosethathave

merelygottenbiggerand/or

leaner.Thepremiumisongeneratingstrong,profitable,organicgrowth.•Managing

across

the

portfolio.

Whilestrategies

focused

onEBITDA

growth

taketime,

a

ballooningexitbacklog

also

presents

more

immediateconcerns.Fundsneed

to

develop

a

clear-eyed,

pragmaticappraisalofwhereeachportfoliocompanysitsintermsofitsreturnprofile,itscapitalstructure,andits

future

prospects.

As

longasrates

stay

elevated,

GPs

have

choices

to

make:Whichcompanieswillreapanacceptablereturnifwesellnow?Whichshouldwesellanyway

so

wecanreturncashto

LPs?Whichcompanies

faceloanexpirations,andwherecanwe

effectively

“amendandextend”toreshapeabalancesheetwithouttoomuchpain?Whatareouroptionsforgeneratingliquiditythroughtheburgeoningsecondarymarket?Iftheindustry’sgrowinginventoryofunsoldassetsisn’tgoingtobe

aproblem,thereareafewthingsyouhave

tobelieve.First,withalargevolumeofportfoliocompaniesfacingrefinancinghurdles,itwillbe

criticalthatdebtholderstakethestancetheydidin2008–09.Lendersclearlydidn’twantthekeystoabunchoftroubledportfoliocompaniesthenandprobablydon’twantthemnow.

Thatleavesopentheopportunitytopay

apenalty,addsomeequity,

andarriveataworkablecapitalstructure.Thesecond

thingyou

need

to

believeisthatthere

are

enoughinnovative

solutions

likecontinuationfunds,securitizations,andNAV

financingtohelpGPsrecapprizedassetsandwaitforreturnstoripenwhilekeepingeconomicinterestalignedbetweenGPsandLPs.Thesecondariesspaceisstillsmallandsomewhatcontroversial.Butitisgrowingrapidlyandrepresentsthekindoffinancialinnovationthatisprivateequity’sspecialty.•Professionalizing

fund-raising.

Aneffective

portfolio

scan

shouldlead

toa

clear,

practicalroadmapforsteering

thefundthrough

animmensely

difficultperiod.

ThenextstepiscommunicatingtoLPshow

portfolio

managers

are

usingallthetools

attheirdisposal

toact

asa

trusted

steward

ofinvestorcapital.GPs

aren’t

particularlyadept

atthiskindofcommunicationbecause

theyhaven’t

hadtobe

inthepast.

Adhoc,anecdotalconversationsaboutasingleportfoliocompanyweresufficientwhenperformanceoverallwasn’treallyinquestion.Now

performanceiseverything,andthecompetitionforalimitedpoolofcapitalhasneverbeenmorefierce.Thisisspurringthemostproactivefundsto

considermakinga

stepchangeinhowtheyapproach

investors

by

professionalizing

processes

andhoningtheirgo-to-market

capabilities.Thefirmsout-raisingothers

arestrategicallymappingoutwhotheirLPs

shouldbe

anddevelopingthecapabilitiesandtoolsnecessaryto

understandwhatittakesto

winwiththemandexpandshareofwallet.TheyarebuildingthekindofcommercialorganizationsthebestB2Bsellersrelyondaily.8GlobalPrivateEquityReport2024None

ofthisiseasy,

ofcourse,butnoneofitisinsurmountable.

Private

equitysurvivedtheoverexuberance

oftheRJRNabisco

years.

Itlived

through

9/11

andthesubsequent

recession.

Ittooktheworstblows

oftheglobalfinancialcrisisandcameouteven

stronger.

Theindustry,

inother

words,hasconsistentlydemonstrateditsresilience.Thisisoneofthose

moments.Timeto

getto

work.Here’s

amoredetailedlookatwhathappenedin2023.InvestmentsPrivate

equity

dealmakers

tend

to

makethemost

ofthecards

they’re

dealt.

As

longastheyhavereasonableconfidenceinwhat’scoming,they’llfindaway

tomakeagooddealwork.Butconfidencewas

thefirst

casualtywhentheFed

jacked

rates

atthefastest

pacesincethe1980s,

leaving

theindustrygaspingforair.

Thefalloffthatstartedinthesecondhalfof2022bledoverinto2023.Excludingadd-ons,buyoutinvestmentvaluedroppedto$438billion,a37%decreasefrom2022andtheworsttotalsince2016

(see

Figure

4).

Overalldeal

countdropped

20%to

around

2,500transactions.The

steep

slope

ofthedecline

was

something

theindustry

hadn’t

experienced

sincetheglobalfinancialcrisis.Themalaiseinfectedregionsacrosstheworld,withEuropeandAsia-Pacificboth

experiencingsignificantdeclines(see

Figure

5).Figure

4:

Thetwo-yearfalloffinglobalbuyoutdealvaluemarksthesteepestdeclinesincetheglobalꢀinancialcrisisGlobal

buyout

deal

value,

byregionDealcountChange

in

deal

value2023

vs.

2023

vs.1,086$1,200B1,0008006004002004,0003,0002,0001,000020225-yr.avg.726Restofworld–22%–47%694699499532519Asia-Pacific–8%–32%–38%332463438397369240295305Europe–46%22223119594NorthAmerica–38%–31%0200506

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23Total–37%–34%Avg.2564761182603043495215421,029700

801788deal494165229206278380604size($M)Notes:Excludesadd-ons;excludesloan-to-owntransactionsandacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;geographybasedontarget’s

location;averagedealsizecalculatedusingdealswithdisclosedvalueonlySource:Dealogic9GlobalPrivateEquityReport2024Figure

5:

DealvalueandactivitydeclinedgloballyNorth

AmericaBuyout

deal

valueEuropeAsia-PaciꢀicBuyout

deal

valueBuyout

and

growth

deal

valueBuyoutcount2,000Buyoutcount2,000Buyoutandgrowthcount$600B400$600B400$600B4006,0004,0002,00001,5001,0005001,5001,00050020020020000000201220232012202320122023Notes:NorthAmericaandEurope—excludesadd-ons;excludesloan-to-owntransactionsandacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;geographybasedontarget’s

location;Asia-Paciꢀic—includesbuyout,growth,early-stage,privateinvestmentinpublicequity,andturnarounddeals;excludesadd-ons;excludesrealestate;dealvalueexcludesdealswithannouncedvaluelessthan$10million;includesinvestmentsthathaveclosedandthoseatagreement-in-principleordeꢀinitiveagreementstageSources:Dealogic;AVCJ;

BainanalysisDealsofallkindsfelttheimpact,butthosethatdependedonbankfinancingsufferedthemost.Asyieldsonlargesyndicatedloansapproached11%

intheUSand9%inEurope(both10-yearhighs),banksretreatedandissuanceofnewloansplunged(see

Figure

6).Thelackofaffordableleveragecutthenumberofmegadeals—thoseover$5billion—byalmosthalf,andtheaveragedealsizedroppedto$788million,downfromthepeakof$1billionin2021.Buyoutsbroadlysaw

double-digitdeclinesindealcount(see

Figure

7).Technologydeals,whichbynaturerequirelessleveragethandealsinothersectors,maintainedtheirdominantshareoftotalbuyoutcount,butasset-heavytraditionalindustrieslikeindustrialgoodsandservicesexpandedtheirshareslightly,benefitingfromaflighttosafetyamonginvestorslookingforstabilitywherevertheycouldfindit

(see

Figure

8).Thegrowthandventurecapitalsegments,meanwhile,continuedtodriftsideways.Bothfocusonriskier,earlier-stage

companieswhose

growth-basedvaluationsareparticularlyvulnerabletointerestratepressure.Theywerealsobuffetedbythelingeringimpactofthecryptocollapsein2022andtheimplosionofSiliconValley

Bankin2023

(see

Figure

9).Elevatedinterestratescontributedtoseveralotherimportantshiftsinthefinancingenvironment.Privatecreditcontinuedtoaggressivelyfillgaps

leftbythebigbanksandcaptured84%

ofthemiddle10GlobalPrivateEquityReport2024Figure

6:

Withyieldsonleveragedbankloansshootingthroughtheroof,

LBOloanissuanceplungedin2023,makingithardtoꢀinancetransactionsLeveraged

buyout

(LBO)

yieldsSyndicated

LBO

loan

issuance

($B)12.0%22310.9%8.9%10.08.06.04.02.0176145(–56%)13411310710610410091$64B500.02012

13

14

15

16

17

18

19

20

21

22

2312

13

14

15

16

17

18

19

20

21

22

23US

EuropeUSlargecorporateEuropeaninstitutionalNotes:EuropeaninstitutionalspreadincludesalltrackedLBOdeals,regardlessofsize;USlargecorporatedeꢀinedasLBOswithmorethan$50millioninEBITDA;Europesyndicatedloanvolumeconvertedusingeuro/USdollarconversionrateof1.076Sources:LCD;LSEGFigure

7:

Dealsofallsizesdeclinedin2023andwerewelloffꢀive-year

averagesShare

of

global

buyout

deal

count,

bydeal

size2023

vs.

2023

vs.20225-yr.avg.100%80604020Morethan$5B$1B–$5B–47%–20%–34%–32%$0.1B–$1B–34%–33%Lessthan$0.1B–43%–46%020186041920212223Total–36%–38%Avg.

dealsize($M)5427001,029801788Notes:Includesdealswithdisclosedvalueonly;excludesadd-ons;excludesloan-to-owntransactionsandacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;averagedealsizecalculatedusingdealswithdisclosedvalueonlySources:Dealogic;Bainanalysis11GlobalPrivateEquityReport2024Figure

8:

Technologyremainedtheleaderindealcount,butindustrialsincreasedshareasinvestorslookedfor

stabilityinatraditionalsectorShare

of

global

buyout

deal

count,

bysector100%PublicsectorRealestate806040200TelecommunicationsTransportationMediaandentertainmentUtilitiesandenergyRetailConsumerproductsFinancialservicesHealthcareServicesIndustrialsTechnology201828193120302122272324Technology'sshareoftotal(%)29Notes:Excludesadd-ons;excludesloan-to-owntransactionsandacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochangeSource:DealogicFigure

9:

Aftersoaringduringthepandemic,growthandlate-stageventureinvestinghascomebacktoearthGlobal

growth

capital

invested,

byinvestment

stage,

quarterly263$250B20023622120820319515515010050013913012912312194110111106981009389GrowthequityLate-stageventurecapitalEarly-stageventurecapital20192020202120222023Notes:Late-stageventurecapitaldeꢀinedasꢀinancingbyaVC

ꢀirminSeriesBthroughSeriesZ+

roundsand/ormorethanꢀiveyearsafterthecompany’sfoundingdate;growthequitydeꢀinedasanoncontrol,equityinvestmentbyaPEꢀirmintoacompany,withcashreceivedbythecompanySource:PitchBook12GlobalPrivateEquityReport2024market—dealswitha

totalloanpackageoflessthan$500million

(see

Figure

10).

At

thesametime,investors

responded

to

theincreased

financingcostsby

usingless

debt

andmore

equity

overall.Debtmultiplesin2023dropped17%from2022to

5.9

times

EBITDA,thelowestlevelsince2012(see

Figure

11).

That’s

notsurprisinggiven

thatinterestcoverageratiosinboththeUSandEuropewere

theworstthey’ve

beeninyears(aswe’ll

discussmorefullyinthefollowingsectiononexits).Highinterestrates,inandofthemselves,makeacquisitionsharderto

pencilby

raisingthecostofcapital.Butthey’ve

alsocomplicateddealmakingover

thepastyear

by

promisingto

putdownwardpressureonpricemultiples(even

ifpricesremainrelatively

highhistorically).Thisisessentiallyamathissue:Whenratesgodown,multiplesofcashflow

goup,

andviceversa.Becauseofthat,rock-bottomratesforthepastdecadehave

provideda

tailwindfordealsby

keepingpricemultiplesgrowing.Thatmadeacquisitionspricey,

butifbuyers

couldcountonsellinganassetformorethantheypaid,themathstillworked.Now

thecalculationisharder.Pricemultipleshave,

infact,declinedslightlyoverthepastyear,

buttheystillsitatalmost11

timesEBITDAintheUSandaround10timesinEuropeassellersseektounloadthestrongassetsthey’reconfidentwillsell

(see

Figure

12).Thatmakestheaveragetargetcompanyexpensiveonahistoricalbasis,yetit’s

hardtoassumethatmultipleswilldoanythingbutcontinuetoeaseoffuntilinterestratesbegintomoderate.Figure

10:

Withbankspullingback,privatelenderscontinuedtoexpandtheirshareofꢀinancingmiddle-marketdealsShare

of

US

middle-market

LBO

loan

issuance,

bydebt

type100%16%

Syndicateddebt20%25%34%37%44%42%49%51%64%84%

Directlending80%75%66%2063%1858%1956%1651%1549%1736%20142122AsofQ323Notes:Middlemarketincludesissuerswithrevenueslessthan$500millionandtotalloanpackagelessthan$500million;directlendingincludesnonsyndicatedfacilities,includingclublendingSource:LSEGLPC13GlobalPrivateEquityReport2024Figure

11:

Debtmultiplesfelltoa

10-year

lowasrisinginterestratesmadeithardertopileonleverageUS

large

corporate

debt

to

EBITDA

ratio

for

LBO

loans(–17%)7.17.1x7.06.96.76.66.56.46.26.16.05.95.95.75.65.54.8200708091011121314151617181920212223Source:LSEGLPCFigure

12:

Purchasepricemultiplessoftenedslightlyinresponsetorisinginterestrates,butnotenoughtocounterbalancetheincreasedcostofcapitalAverage

EBITDA

purchase

price

multiple

for

LBO

transactions15.0x10.8xUSEurope10.05.010.1x0.02000020406081012141618202223Source:LCD14GlobalPrivateEquityReport2024Figure

13:Globaldrypowderacrossprivateassetclasseshasbeenstackingupforalmosta

decadeandsetanotherrecordin2023Global

private

capital

dry

powder,

byfund

type2023

vs.

2023

vs.3.920225-yr.avg.$4.0T3.03.5Other65%0%62%17%3.2DistressedPE3.0Secondaries9%39%Directlending

15%42%28%2.5Infrastructure5%2.3Growth5%39%3%2.02.0Realestate–15%1.71.5Venturecapital1.4

1.49%69%0.61.2

1.21.11.1

1.11.10.91.0Buyout16%28%0.0200506

07

08910

11

12

13

14

15

16

17

18

19

20

21

22

23

Total12%35%Buyout'sshareoftotal(%)44

45

43

43

42

40

37

35

34

35

36

35

37

36

36

33

30

30

31Notes:Buyoutcategoryincludesbuyout,balanced,coinves