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Large deals continued mostly unabated – the number of transactions of US$3b or more climbed by a third, driven by continued activity in take-privates and carve-outs. The first quarter saw 21 take-private deals, underscoring the degree to which PE firms continue to perceive opportunities and mispricings, despite tremendous recent gains in public equities indices. Technology, industrials, energy, defense, consumer, and financials are all spaces where PE firms have led de-listings in recent months.
Carve-out activity remains similarly robust, as strategics continue to rationalize their businesses and raise cash to invest in core competencies. Last quarter, carve-outs made up 20% of deployment activity by value, versus approximately 5% in Q1 2023, and 11% in Q4 2023.
From a sector perspective, tech remains a dominant theme, although investment as a percentage of aggregate deployment has dipped slightly over the last 12 months versus the prior 12. Consumer, by contrast, over the same period grew from 10% of aggregate deployment by value to 14%, driven by interest in verticals such as health food, luxury retail, and pet care. Financials also received a larger share of invested capital, growing from just 6% of deployment by value a year ago to 16% over the last 12 months. While activity in the insurance sector has been a major driver, brokers, wealth managers, and even regional banks have all seen elevated interest from sponsors.