Private equity US market insights and trends

PE Pulse. Explore US industry market trends and what private equity leaders are focusing on in 2024.

Third-quarter US private equity (PE) deal activity was robust with increased availability of financing.

PE deal activity recovered in 3Q24 as general partners (GPs) gained confidence in the macroeconomic environment along with the anticipation of US interest rate cuts, which occurred in September 2024. Third-quarter 2024 deal value reached roughly US$89b for transactions of US$100m or above.

Deal activity was augmented by narrowing loan spreads, which receded to multiyear lows with rising competition between banks and private credit shops. GPs raised US$20.6b in the broadly syndicated market (BSM) to finance leveraged buyouts (LBOs), with an appetite for tech assets.

Exit value only rose 4% in the first nine months of 2024 compared to the same period last year. The muted exit environment reflects that PE firms are waiting to bring their best assets to market when valuations are more favorable.

Deal activity¹ witnessed an increase in its value and volume; 3Q24 has been the most successful quarter so far, reaching ~US$90b in deal value as PE firms get confident operating in higher than usual interest rate environments.

Deal value-volume for significant deals, US$100m and above

In Q1 of 2020, PE deal value is US$ 55b with 47 deals
In Q2 of 2020, PE deal value is US$ 15b with 31 deals
In Q3 of 2020, PE deal value is US$ 96b with 70 deals
In Q4 of 2020, PE deal value is US$ 95b with 72 deals
In Q1 of 2021, PE deal value is US$ 132b with 114 deals
In Q2 of 2021, PE deal value is US$ 162b with 96 deals
In Q3 of 2021, PE deal value is US$ 144b with 96 deals
In Q4 of 2021, PE deal value is US$ 125b with 75 deals
In Q1 of 2022, PE deal value is US$ 133b with 77 deals
In Q2 of 2022, PE deal value is US$ 121b with 72 deals
In Q3 of 2022, PE deal value is US$ 70b with 54 deals
In Q4 of 2022, PE deal value is US$ 54b with 39 deals
In Q1 of 2023, PE deal value is US$ 70b with 39 deals
In Q2 of 2023, PE deal value is US$ 64b with 42 deals
In Q3 of 2023, PE deal value is US$ 72b with 41 deals
In Q4 of 2023, PE deal value is US$ 41b with 33 deals
In Q1 of 2024, PE deal value is US$ 69b with 36 deals
In Q2 of 2024, PE deal value is US$ 80b with 47 deals
In Q3 of 2024, PE deal value is US$ 89b with 55 deals

Consistent growth in deal activity is fueled by squeezed loan spreads that reached multiyear lows.

Spread (bps) over base rate

In Q3 of 2018, all at 390, sponsored at 404, not-sponsored M&A at 300 and LBO at 418
In Q4 of 2018, all at 423, sponsored at 432, not-sponsored M&A at 388 and LBO at 463
In Q1 of 2019, all at 432, sponsored at 437, not-sponsored M&A at 410 and LBO at 459
In Q2 of 2019, all at 435, sponsored at 452, not-sponsored M&A at 344 and LBO at 488
In Q3 of 2019, all at 429, sponsored at 452, not-sponsored M&A at 323 and LBO at 464
In Q4 of 2019, all at 432, sponsored at 440, not-sponsored M&A at 394 and LBO at 446
In Q1 of 2020, all at 391, sponsored at 416, not-sponsored M&A at 300 and LBO at 401
In Q2 of 2020, all at 458, sponsored at 458, not-sponsored M&A at 459 and LBO at 465
In Q3 of 2020, all at 427, sponsored at 433, not-sponsored M&A at 414 and LBO at 433
In Q4 of 2020, all at 432, sponsored at 439, not-sponsored M&A at 393 and LBO at 428
In Q1 of 2021, all at 399, sponsored at 402, not-sponsored M&A at 392 and LBO at 387
In Q2 of 2021, all at 388, sponsored at 414, not-sponsored M&A at 297 and LBO at 415
In Q3 of 2021, all at 407, sponsored at 425, not-sponsored M&A at 339 and LBO at 431
In Q4 of 2021, all at 396, sponsored at 415, not-sponsored M&A at 329 and LBO at 412
In Q1 of 2022, all at 420, sponsored at 434, not-sponsored M&A at 372 and LBO at 444
In Q2 of 2022, all at 466, sponsored at 482, not-sponsored M&A at 391 and LBO at 507
In Q3 of 2022, all at 463, sponsored at 504, not-sponsored M&A at 319 and LBO at 534
In Q4 of 2022, all at 486, sponsored at 502, and not-sponsored M&A at 446
In Q1 of 2023, all at 463, sponsored at 476 and LBO at 430
In Q2 of 2023, all at 440, sponsored at 449 and LBO at 404
In Q3 of 2023, all at 427, sponsored at 440, not-sponsored M&A at 393 and LBO at 452
In Q4 of 2023, all at 436, sponsored at 465, not-sponsored M&A at 370 and LBO at 525
In Q1 of 2024, all at 400, sponsored at 420, not-sponsored M&A at 325 and LBO at 383
In Q2 of 2024, all at 351, sponsored at 393, not-sponsored M&A at 259 and LBO at 364
In Q3 of 2024, all at 358, sponsored at 390, not-sponsored M&A at 288 and LBO at 383

Technology sector, buoyed by interest in AI, emerged as the most favored sector in the first nine months of 2024 ‒ garnering 26% of the deal volume. Compared to same period last year, Consumer slipped to second place as PE’s interest declined due a to weakening Consumer Confidence Index, which deteriorated by 7 points to 98.7 in September from August 2024.

Percentage of PE investments by sector in YTD of 2024 vs YTD of 2023

For the Technology sector, 26% in YTD of 2024 vs. 23% in YTD of 2023
For the Consumer sector, 25% in YTD of 2024 vs. 27% in YTD of 2023
For the Materials sector, 14% in YTD of 2024 vs. 12% in YTD of 2023
For the Healthcare sector, 9% in YTD of 2024 vs. 9% in YTD of 2023
For the Industrials sector, 8% in YTD of 2024 vs. 10% in YTD of 2023
For the Financials sector, 8% in YTD of 2024 vs. 8% in YTD of 2023
For the Utilities sector, 3% in YTD of 2024 vs. 5% in YTD of 2023
For other sectors that includes retail, oil and gas, telecom, and real estate, 7% in YTD of 2024 vs. 6% in YTD of 2023

Exit volume showed improvement, increasing by over 27%, while the exit value remained reluctant to grow due to sponsors' hesitance to divest their portcos.

PE exits from Q1 of 2020 to Q2 of 2024

In Q1 of 2020, exit value of US$ 45b with exit count of 145
In Q2 of 2020, exit value of US$ 16b with exit count of 82
In Q3 of 2020, exit value of US$ 111b with exit count of 171
In Q4 of 2020, exit value of US$ 128b with exit count of 239
In Q1 of 2021, exit value of US$ 168b with exit count of 244
In Q2 of 2021, exit value of US$ 206b with exit count of 314
In Q3 of 2021, exit value of US$ 131b with exit count of 284
In Q4 of 2021, exit value of US$ 121b with exit count of 307
In Q1 of 2022, exit value of US$ 60b with exit count of 181
In Q2 of 2022, exit value of US$ 206b with exit count of 170
In Q3 of 2022, exit value of US$ 56b with exit count of 171
In Q4 of 2022, exit value of US$ 70b with exit count of 144
In Q1 of 2023, exit value of US$ 38b with exit count of 111
In Q2 of 2023, exit value of US$ 43b with exit count of 102
In Q3 of 2023, exit value of US$ 61b with exit count of 106
In Q4 of 2023, exit value of US$ 50b with exit count of 121
In Q1 of 2024, exit value of US$ 64b with exit count of 139
In Q2 of 2024, exit value of US$ 42b with exit count of 120
In Q3 of 2024, exit value of US$ 42b with exit count of 147

The scant distribution causing dissatisfaction among LPs.

LP satisfaction with distribution rate**

As sponsors wait for more attractive valuations, there has been an increase in financing dividends in the broadly syndicated loans (BSL) market.

Dividends paid to PE sponsors via leveraged loan market (US$b)

In Q1-Q3 of 2019, leveraged loan market at US$ 8.4b, and in Q4 of 2019, leveraged loan market at US$ 2.2b
In Q1-Q3 of 2020, leveraged loan market at US$ 4.0b, and in Q4 of 2020, leveraged loan market at US$ 6.8b
In Q1-Q3 of 2021, leveraged loan market at US$ 26.7b, and in Q4 of 2021, leveraged loan market at US$ 8.4b
In Q1-Q3 of 2022, leveraged loan market at US$ 4.5b, and in Q4 of 2022, leveraged loan market at US$ 0.4b
In Q1-Q3 of 2023, leveraged loan market at US$ 8.8b, and in Q4 of 2023, leveraged loan market at US$ 4.7b
In YTD of 2024*, leveraged loan market at US$ 26.4b

… and by focusing transactions in the GP-led markets to generate liquidity for LPs.

Global GP-led secondary market (US$b)^#

Global GP-led secondary market (US$b)

In 2020, GP-led contributions at US$ 30b and GP-led contribution in the total secondary market at 50%
In 2021, GP-led contributions at US$ 63b and GP-led contribution in the total secondary market at 50%
In 2022, GP-led contributions at US$ 44b and GP-led contribution in the total secondary market at 43%
In 2023, GP-led contributions at US$ 48b and GP-led contribution in the total secondary market at 44%
In 1H of 2023, GP-led contributions at US$ 17b and GP-led contribution in the total secondary market at 40%
In 1H of 2024, GP-led contributions at US$ 31b and GP-led contribution in the total secondary market at 44%

The 10 largest funds to close in 2024 accounted to nearly half (47%) of all PE fundraising³.

PE fundraising from Q1 of 2020 to Q3 of 2024

In Q1 of 2020, fund value raised is US$ 97b and fund count is 170
In Q2 of 2020, fund value raised is US$ 51b and fund count is 49
In Q3 of 2020, fund value raised is US$ 23b and fund count is 54
In Q4 of 2020, fund value raised is US$ 118b and fund count is 389
In Q1 of 2021, fund value raised is US$ 108b and fund count is 229
In Q2 of 2021, fund value raised is US$ 96b and fund count is 116
In Q3 of 2021, fund value raised is US$ 72b and fund count is 113
In Q4 of 2021, fund value raised is US$ 131b and fund count is 540
In Q1 of 2022, fund value raised is US$ 89b and fund count is 233
In Q2 of 2022, fund value raised is US$ 123b and fund count is 105
In Q3 of 2022, fund value raised is US$ 81b and fund count is 113
In Q4 of 2022, fund value raised is US$ 139b and fund count is 623
In Q1 of 2023, fund value raised is US$ 88b and fund count is 198
In Q2 of 2023, fund value raised is US$ 102b and fund count is 103
In Q3 of 2023, fund value raised is US$ 121b and fund count is 91
In Q4 of 2023, fund value raised is US$ 110b and fund count is 287
In Q1 of 2024, fund value raised is US$ 86b and fund count is 87
In Q2 of 2024, fund value raised is US$ 95b and fund count is 82
In Q3 of 2024, fund value raised is US$ 76b and fund count is 90

Sources: Dealogic; PitchBook; EY analysis, **Jefferies H1 2024 Global Secondary Market Review, #Lazard Interim Secondary Market Report 2024; ¹ Indicates US PE transactions valued at US$100m and above; ² Others includes Telecom, Retail, Oil and Gas, Real Estate; YTD figures through September 30, 2024; ³ Fundraising analysis based on closed funds’ location.

Our latest thinking

Private Equity Pulse: key takeaways from Q3 2024

The PE Pulse is a quarterly report that provides data and insights on private equity market activity and trends. Read the latest report.

Pete Witte

Global economic outlook: strategies to thrive in a new normal

The mid-2024 EY global economic outlook calls for steady but desynchronized growth and gradually looser monetary policy. Read the report.

Gregory Daco + 1

Top five private equity trends for 2024

Read about the five key trends private equity firms will emphasize in 2024 as they create value

Timothy Tracy + 1

The Navigator: perspectives on financial services M&A

Financial institutions are building competitive advantage through M&A. Read on to learn more.

Sid Khosla

Three ways CFOs are adapting to emerging private equity trends

Discover the latest insights on private equity trends from the EY Global Private Equity Survey to make better, more informed investment decisions.

Kyle Burrell + 3

The team

Timothy Tracy

EY Americas Private Equity Leader

Advisor to Fortune 500 companies for more than 30 years, providing value-added services. Global traveler. Husband, dad, golfer.

Iselin, USA

Ivan Lehon

EY Americas Private Equity Markets Leader

Experienced in complex private equity deals. Cultivates inclusive next-gen leadership and exceptional career experiences. Passionate about family. Proud New Yorker. Advocate for the underrepresented.

New York, USA

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

Insights

Trending topics

Spotlight

Services

Spotlight

Careers

Spotlight

Industries

Case studies

About us

Top news

Private equity US market insights and trends

Deal activity¹ witnessed an increase in its value and volume; 3Q24 has been the most successful quarter so far, reaching ~US$90b in deal value as PE firms get confident operating in higher than usual interest rate environments.

Consistent growth in deal activity is fueled by squeezed loan spreads that reached multiyear lows.

Exit volume showed improvement, increasing by over 27%, while the exit value remained reluctant to grow due to sponsors' hesitance to divest their portcos.

The scant distribution causing dissatisfaction among LPs.

As sponsors wait for more attractive valuations, there has been an increase in financing dividends in the broadly syndicated loans (BSL) market.

… and by focusing transactions in the GP-led markets to generate liquidity for LPs.

The 10 largest funds to close in 2024 accounted to nearly half (47%) of all PE fundraising³.

The team

Timothy Tracy

Ivan Lehon

Insights

Trending topics

Spotlight

Services

Spotlight

Careers

Spotlight

Industries

Case studies

About us

Top news

Private equity US market insights and trends

Deal activity1 witnessed an increase in its value and volume; 3Q24 has been the most successful quarter so far, reaching ~US$90b in deal value as PE firms get confident operating in higher than usual interest rate environments.

Consistent growth in deal activity is fueled by squeezed loan spreads that reached multiyear lows.

Exit volume showed improvement, increasing by over 27%, while the exit value remained reluctant to grow due to sponsors' hesitance to divest their portcos.

The scant distribution causing dissatisfaction among LPs.

As sponsors wait for more attractive valuations, there has been an increase in financing dividends in the broadly syndicated loans (BSL) market.

… and by focusing transactions in the GP-led markets to generate liquidity for LPs.

The 10 largest funds to close in 2024 accounted to nearly half (47%) of all PE fundraising³.

The team

Timothy Tracy

Ivan Lehon

Deal activity¹ witnessed an increase in its value and volume; 3Q24 has been the most successful quarter so far, reaching ~US$90b in deal value as PE firms get confident operating in higher than usual interest rate environments.