2024 M&A outlook for Private Equity (2024)

FAQs

2024 M&A outlook for Private Equity? ›

Driven by renewed confidence and increased access to capital, private equity dealmaking is set to pick up during 2024. As macroeconomic headwinds steady and financial markets continue to reopen, the outlook for private equity (PE) M&A in 2024 looks promising.

Private equity firms will focus on five key trends in 2024. Deploying artificial intelligence will lead the way, followed by investment in infrastructure particularly related to energy projects. Value creation will also be a priority as firms seek to improve strategic and operational efficiency.

In brief. The latest Deal Barometer forecasts that 2024 US corporate M&A deal volume will increase 20% and US private equity M&A deal volume will be up 16%. Q1 2024 saw a 36% increase in global deal value. Our M&A outlook shows CEOs are looking to make acquisitions, and there is a rise in those looking to divest assets ...

“We are optimistic for a return to dealmaking in 2024, and our 2024 M&A Outlook survey of dealmakers also shows the same optimism,” says Carole Streicher, head of Deal Advisory and Strategy at KPMG LLP. Based on the survey results, KPMG expects the revival of PE deal activity to accelerate in the second half.

As the markets continue to heal and sentiment improves, we expect 2024 to be a year of rebalancing, bolstered by renewed optimism, fresh pools of capital and pent-up demand. A recalibration of markets and alignment of valuations have given way to a unique set of opportunities.

According to Bain, “the numbers are all very GFC-like: Deal value and deal count have fallen 60 percent and 35 percent, respectively, from their peaks in 2021. Exit value is down 66 percent, and the number of funds closing is off by nearly 55 percent.”

The S&P 500 generated an impressive 26.29% total return in 2023, rebounding from an 18.11% setback in 2022. Heading into 2024, investors are optimistic the same macroeconomic tailwinds that fueled the stock market's 2023 rally will propel the S&P 500 to new all-time highs in 2024.

McKinsey's leadership development trends for 2024 include the continued impact of generative AI, quick wins with AI implementations, and the renewed importance of managers in the organizational hierarchy.

With reduced uncertainty in the macro environment and new avenues of growth, dealmakers are optimistic about 2024. The financial services landscape saw a slowdown in M&A activity in 2023, but hopes remain high for a more dynamic market in 2024.

Economic recessions typically lead to a decrease in overall M&A activity for a variety of reasons. During a recession, both buyers and sellers usually become more cautious and risk-averse, which can slow down deal-making.

Does KPMG do private equity? ›

KPMG is now taking one of the leading positions in offering a combined approach to helping our private equity clients with their strategic, deal and portfolio management issues.

KPMG Reviews FAQs

KPMG has an overall rating of 3.8 out of 5, based on over 66,927 reviews left anonymously by employees. 73% of employees would recommend working at KPMG to a friend and 63% have a positive outlook for the business. This rating has decreased by 1% over the last 12 months.

In 2023, KPMG generated a record revenue of 36.4 billion U.S. dollars. This was an increase of approximately 2.24 billion U.S. dollars compared to the previous year. KPMG is one of the leading accounting and audit firms in the world, and has generated more than 20 billion U.S. dollars in revenue annually since 2008.

In 2024, J.P. Morgan Research estimates 2–3% earnings growth for the S&P 500 and a price target of 4,200.

The S&P 500 index, which tracks the biggest US companies, has been breaking record after record – and that has analysts scrambling to rewrite their expectations for this year. Goldman Sachs just upgraded its forecast for the third time, projecting that the index will reach a level of 5,200 by the end of 2024.

Additional key takeaways from ISG's 2024 Outlook include:

A 30% risk of recession in the US for the year ahead; Modest mid-single-digit returns for a 50% stocks–50% bonds benchmark; and. Significant geopolitical risks to the outlook, most of which originate from heightened geopolitical tensions and escalating wars.

What's the outlook for alternative investments? Private equity funds with an older vintage — the year in which they first drew down capital — might continue to struggle in a high-interest environment. Private credit spreads will likely narrow in 2024 as competition increases and sponsors demand more attractive terms.

Private capital enters a new era of value creation opportunity and dealmaking. The outlook for private capital in 2024 is positive, as a more stable investing environment is bringing renewed optimism that M&A activity will steadily pick up in the course of 2024.

According toCambridge Associates' U.S. Private Equity Index, PE had an average annual return of 14.65% in the 20 years ended December 31,2021. In comparison, theCambridge Associates U.S. Venture Capital Index found that VC returns averaged 11.53% in the same 20-year period.

Institutional investors and wealthy individuals have increasingly turned to private equity firms for greater returns and control. These firms acquire, restructure, and often improve the performance of companies, driving economic growth and innovation.