While private equity fundraising and investment measures in 3Q23 fell from 2Q, exits were a bright spot with dollar volume increases for buyout and venture M&A and buyout IPO volumes. The number of venture IPOs increased as well.
3Q23 private equity activity, from fundraising to exits
Fundraising | Based on preliminary data, private equity partnerships holding final closes in 3Q totaled $171 billion, with 435 new partnerships formed (unless otherwise noted, all data are from PitchBook). The dollar volume fell 13% from 2Q23, and the number of funds holding final closes declined 19%. So far, capital raised is running only 22% behind YTD 2022, but the number of funds trails by 42%.
Buyouts | New buyout transactions and dollar volume fell moderately. Funds closed 2,398 company investments with $123 billion of disclosed deal value, a 16% decrease in count and an 8% drop in dollar value from 2Q23.
VC Investments | New financing rounds in venture capital companies totaled 8,977, with $82 billion of announced value. The number of investments was down 21% from the prior quarter, but the announced value fell only 1%.
Exits | There were 507 private M&A exits of private equity-backed companies (excluding venture capital), with disclosed values totaling $123 billion. Exits fell 7% from the prior quarter but announced dollar volume increased 23%. There were 43 private equity-backed IPOs in 3Q raising $12 billion, the count fell by 2 IPOs but dollar volume leapt 50%.
Venture-backed M&A exits totaled 489 with disclosed value of $27 billion. The number of sales declined 10% but announced dollar volume jumped 93%. There were 102 VC-backed IPOs (up 19% from 2Q) but the combined float fell to $10 billion.
Returns | With the significant 2Q rally in public equity markets, private equity trailed for the quarter and last 12 months. Private equity posted a third consecutive quarterly gain after the large retreat across most of 2022. Continued capital markets volatility is expected, and private equity should provide a beneficial dampening effect.
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