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.