Outlook reveals increased interest in private
credit asset allocations and AI playing a larger role in deal
sourcing and target selection
NEW
YORK, April 29, 2024 /PRNewswire/ -- The private
equity industry is showing resilience and optimism for 2024 despite
shifting market dynamics, according to the S&P Global Market
Intelligence 2024 Private Equity and Venture Capital Outlook.
According to the outlook, private equity executives are notably
more optimistic about deal activity in 2024 with 60% expecting an
improvement, compared to 34% last year. Survey respondents also
showed increased interest in private credit and shared that
artificial intelligence (AI) will play a larger role in deal
sourcing and target selection.
"This year's survey revealed more optimism among both general
partners (GPs) and investors as they are racing for a return to
increased deal activity with increasing valuations allowing them to
exit their backlog of investments and return cashflows to limited
partners (LPs)," said Thomas
Mercieca, associate director and lead author for the report,
at S&P Global Market Intelligence. "There is also increased
investor interest in private credit allocation, with 61% of LPs
reporting that they will increase their asset allocation to the
asset class in 2024. We are pleased to see that despite
macroeconomic challenges still lingering, the industry remains
adaptable and poised for growth throughout 2024."
Key highlights from the 2024 Private Equity and Venture Capital
outlook:
- Mid-tier and smaller private equity (PE) firms are more
optimistic for the deal activity to pick up in 2024 compared to
their larger peers.
- 61% of limited partners (LPs) investing in private markets
reported they will increase their asset allocation to private
credit in 2024.
- Presently, fund managers prioritize personal networks and
referrals for sourcing investment opportunities. However, 54% of GP
investment professionals foresee AI influencing deal sourcing and
target selection in the future.
- Among private equity GPs, in the past year 37% reported
expanding their use of private credit in deal financing, with
larger PE firms in particular making more use of private credit
over bank loans.
- Private equity GPs feel the fundraising outlook has bottomed
out: only 15% of GP respondents expect deteriorating fundraising
conditions in 2024, versus 45% at the start of 2023. However, among
venture capital (VC) firms there are remaining concerns about LPs
reducing their allocation to VC.
- A majority of VC professionals expect deal activity to improve
in 2024 (68%), but there are a substantial number of respondents
saying conditions will stay the same as 2023 (28%).
The S&P Global Market Intelligence Private Equity and
Venture Capital Outlook surveyed a total of 370 global private
equity, venture capital and limited partner respondents across
North America, Latin America, Asia
Pacific, Middle Eastern and Africa regions. The survey was fielded between
November 16, 2023 and January 12, 2024 covering questions on deal
activity, strategy changes, market and firm-level challenges,
sustainability consideration and technology adoptions.
To request a copy of the 2024 Private Equity and Venture Capital
Outlook, please contact press.mi@spglobal.com.
S&P Global Market Intelligence's opinions, quotes, and
credit-related and other analyses are statements of opinion as of
the date they are expressed and not statements of fact or
recommendation to purchase, hold, or sell any securities or to make
any investment decisions, and do not address the suitability of any
security.
About S&P Global Market Intelligence
At S&P Global Market Intelligence, we understand the
importance of accurate, deep and insightful information. Our team
of experts delivers unrivaled insights and leading data and
technology solutions, partnering with customers to expand their
perspective, operate with confidence, and make decisions with
conviction.
S&P Global Market Intelligence is a division of S&P
Global (NYSE: SPGI). S&P Global is the world's foremost
provider of credit ratings, benchmarks, analytics and workflow
solutions in the global capital, commodity and automotive markets.
With every one of our offerings, we help many of the world's
leading organizations navigate the economic landscape so they can
plan for tomorrow, today. For more information, visit
www.spglobal.com/marketintelligence.
Media Contact:
Amanda Oey
S&P Global Market Intelligence
P. +1 212 438-1904
E. amanda.oey@spglobal.com or press.mi@spglobal.com
View original content to download
multimedia:https://www.prnewswire.com/news-releases/private-equity-and-venture-capital-industry-shows-resilience-and-optimism-in-2024-amidst-shifting-market-dynamics-according-to-sp-global-market-intelligence-survey-302128812.html
SOURCE S&P Global Market Intelligence