Private equity fundraising slides as sector’s downturn deepens
As per the recent FT article Private equity fundraising slides as sector’s downturn deepens
- Private equity groups raised just $592bn in the 12 months to June: their lowest tally for seven years, data from Preqin show.
- They “are offering a smorgasbord of discounts”, said Marco Masotti, global head of private equity fundraising at law firm Paul Weiss, who added in a report by the firm that PE groups were “facing mounting fee pressure and agreeing to a cascade of discounts”.
- The industry’s fundraising has shrunk by nearly a third from its record levels in 2021. Higher interest rates and a slowdown in dealmaking have left firms unable to sell trillions of dollars in ageing investments, causing growing frustration from investors, many of whom are now refusing to back funds.
- As a result, more groups are offering discounts, such as pledging to return the transaction fees that were once charged to their clients, as well as volume-based discounts and novel terms such as caps on some legal and travel expenses.
It is looking pretty rough out there?
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