Private Equity Market Insights - March 2024


Private Equity Market Insights - March 2024


Focus remains on the two trends that have dominated conversations over the past couple of years - a difficult fundraising environment and the slowdown in deal activity, particularly on exits. Our view is that the difficult fundraising environment will become more pronounced for all but the very top tier of managers over the medium term. 2023 saw market leading firms including, CVC, Warburg Pincus, Clayton Dubilier & Rice and Cinven close funds at or near record size at meaningful increases to previous fundraises. Absent a significant increase in exits and distributions, it is difficult to envisage that this will repeat in 2024. The likelihood is that fundraises will continue to take longer and that achieving a fund size close to prior funds will be a strong outcome. Having a strong first close is key to an efficient fundraise, sub optimal or postponed first closes will almost inevitably lead to a very challenging fundraise.

Exit Activity

December and January saw an uptick in announced exits as is usually the case at this time of year with private equity managers looking to lock in exits at year end. Albeit a small sample, it is noticeable that these exits occurred at a much tighter valuation range to their prior mark. Examples of exits at 50%+ uplifts to their prior valuation are increasingly rare. While the IPO market was quiet during Q4 there have been some green shoots in the early part of this year. This included Renk Group AG, a German industrial manufacturer, which successfully listed on the Frankfurt Stock Exchange in February and has experienced a material increase in share price since listing. Other trends we see are that private equity managers who did not maximise the strong exit markets when available, remain under pressure to generate cash returns. This is particularly true for private equity managers who are also in fundraising mode. The private equity managers who utilised the buoyant post covid markets to generate significant exits can be more patient and focus on improving portfolio performance rather than on delivering exits.

Secondary Deal Flow

Our perspective is that in recent years the secondary market has overpromised and underdelivered from a buy side perspective. Larger secondary funds in the market who need to deploy capital have been driving prices higher. There have been a number of false dawns as regards increased supply and a reset in pricing. However, based on what we have seen in recent months there are now more attractive opportunities on the buy side driven by the slowdown in exits. Sales need to happen to generate liquidity. All things being equal owners of private equity funds have had a good run in recent years, they have banked strong returns in many instances and are open to significant discounts on mature/niche positions where the trajectory of future distributions is uncertain. We have purchased three secondary fund positions across Private Equity/Growth/Venture in the current quarter, at discounts in excess of 30pts.

Plans for the year ahead

Prioritisation of secondary fund transactions at sensible pricing is a priority for the year ahead. We see opportunity to continue to add positions across Private Equity Buyout/Growth and Venture and we have the advantage of being nimble and open to executing on small fund sizes. Needless to say we will be exercising a considerable degree of caution as headline discounts are often high for a very good reason. On the primary commitment side, we have a reasonable amount of capital to deploy across these three strategies. The bar will be high for due-diligence on all managers with a particular caution on less established managers where sustainability of their investment platform is contingent on future realised carry which may not materialise and on a strong fundraise. There will be a large increase in failed fundraises and ‘zombie funds’ in the years ahead. Avoiding exposure to these potential issues is something that is at the fore of our due-diligence process.

Contact Us

For further information about the Key Capital – Private Equity Program, email or call us at:


Phone: +353 1 638 3850

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