Snapshot: Cautious Optimism For The Private Equity Sector?

The private equity industry managed to post its second-best ever year in 2022, extending the record highs that were seen in 2021 in terms of buy-out activity and fund-raising. Looking more closely though, it was apparent that 2022 was essentially "a game of two-halves".

The post-covid surge in deal activity continued for the first six months of 2022 and this was despite uncertainty caused by the invasion of Ukraine, growing tensions with China and rising inflation. However, the first in a series of interest rate hikes by US central bankers in June led to similar increases by their peers around the globe. As a result, banks withdrew funding from leveraged transactions and dealmaking effectively nose-dived in the latter part of 2022.