Perspectives on inflation
Sector strategy
The Retail Investing Opportunity
Solving for Inflation
Why Web3 Matters More than Ever
Investing in the Energy Transition
Market Outlook for 2023
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Navigating a Shifting Tide
Global Private Equity
Report 2023
OVERVIEW
In DePTH
SECTION TITLE 03
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It’s easy to think of Dickens and A Tale of Two Cities when looking back on 2022.
The first six months resembled 2021: incredible numbers of deals, lots of exits, and substantial funds committed to the chase for the next five years. Then came the Federal Reserve’s rate hike in June. That move—and those that followed globally—signified the end of cheap debt in buyout markets and raised strong concerns about persistent inflation. Recession fears spooked banks from providing leveraged loans, and the dominoes fell from there, toppling year-end totals for deals, exits, and fund-raising.
This “pause” has continued into 2023 and will likely persist until macro factors stabilize. Yet, as we explore in this year’s Global Private Equity Report, opportunity awaits firms
that stay aggressive and focus on creating value from
the inside out.
Hugh MacArthur
Chairman of Bain’s Global Private Equity practice
Welcome to Bain’s fifth M&A global annual report
Our mission: Improve M&A by sharing practices of the best deal makers
Private equity activity fell well short of 2021’s record totals
Investments
Exits
Fund-raising
2022
2021
Investments made in a downturn outperform over time
8
22
16
18
23
$1,012B
28%
Global
financial
crisis
$654B
$969B
$565B
$413B
$347B
7
21
13
Median global buyout deal IRR
Sources: Dealogic; Preqin; Bain analysis
Source: DealEdge powered by CEPRES data
Global
financial
crisis
Source: DealEdge powered by CEPRES data
Investments made in a downturn outperform over time
2005
2013
21%
13
7
8
22
16
18
23
28%
2013
1999
37
48%
25
10
13%
40
Tech bubble
Median global buyout deal IRR
It’s easy to think of Dickens and A Tale of Two Cities when looking back on 2022.
The first six months resembled 2021: incredible numbers of deals, lots of exits, and substantial funds committed to the chase for the next five years. Then came the Federal Reserve’s rate hike in June. That move—and those that followed globally—signified the end of cheap debt in buyout markets and raised strong concerns about persistent inflation. Recession fears spooked banks from providing leveraged loans, and the dominoes fell from there, toppling year-end totals for deals, exits, and fund-raising.
This “pause” has continued into 2023 and will likely persist until macro factors stabilize. Yet, as we explore in this year’s Global Private Equity Report, opportunity awaits firms
that stay aggressive and focus on creating value from
the inside out.
It’s easy to think of Dickens and A Tale of Two Cities when looking back on 2022.
The first six months resembled 2021: incredible numbers of deals, lots of exits, and substantial funds committed to the chase for the next five years. Then came the Federal Reserve’s rate hike in June. That move—and those that followed globally—signified the end of cheap debt in buyout markets and raised strong concerns about persistent inflation. Recession fears spooked banks from providing leveraged loans, and the dominoes fell from there, toppling year-end totals for deals, exits, and fund-raising.
This “pause” has continued into 2023 and will likely persist until macro factors stabilize. Yet, as we explore in this year’s Global Private Equity Report, opportunity awaits firms
that stay aggressive and focus on creating value from
the inside out.
