After a sluggish 2023, private equity deal value rebounded in 2024, with a 36% increase in the first nine months driven by a closer alignment of buyer and seller valuation expectations and improved market sentiment translating into more active dealmaking, according to EY.
Despite this uptick, top private equity fund backers are adopting a more demanding stance with fund managers. For the past two years, many firms have been cautious, holding off on both selling assets and deploying their dry powder. However, patience among limited partners (LPs)—the investors in private equity funds—has begun to wane.
Lawyers and bankers told City AM that LPs are pushing private equity houses to accelerate deal activity and take advantage of improving market conditions. This shift marks a critical moment for fund managers, who now face mounting pressure to deliver returns as the window for strategic investment and exits becomes increasingly urgent.
