This year’s GP Trends survey reveals an industry at a turning point. After record levels of fundraising and deal activity in 2021, private equity firms are recalibrating their expectations against a more challenging backdrop this year. Inflation and interest rates are at the top of the agenda, with 71% expecting these factors to decrease the availability of finance for deals, and 55% of respondents anticipating more covenant breaches over the next 12 months.
However, most respondents were cautiously optimistic overall. The majority of the GPs surveyed this year expect to deploy more capital than in 2021, and fewer than 10% believe that returns will be lower than last year. In response to the macro-economic headwinds, some respondents expect the fundraising market to become more bifurcated over the next 12-24 months – with top performing funds expected to raise a disproportionate amount of capital.
The report analyses responses from more than 150 private equity professionals, also featuring insight from in-depth interviews with a select group of senior leaders.