GCG’s Q4 2022 Middle Market Private Equity Update provides an overview of the latest trends in the private equity market.
Key findings include the following:
The value of announced private equity deals was down 25% in 2022 compared to 2021, which was a record-setting M&A year. 2022 was still a very strong year from a middle-market M&A perspective, turning in the 2nd best year of private equity M&A deal value. Deal values for 2022 were up 24 – 28% from the 2018-2020 years.
Capital overhang, which represents the amount of capital raised by PE funds that has yet to be invested, has declined for the first time since 2009. The capital overhang is still at a robust level, and fundraising continued at a strong pace during 2022.
2022 saw $343 billion raised by private equity. This is the second-highest year since 2007 and might have eclipsed 2021 if fundraising didn’t slow down considerably during the 4th quarter.
2022 started off relatively strong through Q3, but Q4 took a steep decline. Q4 was down 50% from Q4 2021 and 20% from Q3 2022. Q4 2022 was near the same level as pre-pandemic, but it had the lowest level of any quarter since Q3 2020.