Against The Headwind Of Higher Interest Rates Private Equity Finds A New Source Of Funding

Over the past decade, the private equity industry has been on a tear, powered by cheap debt, and supported by investors chasing growth at any cost, the number of buyout deals has exploded, and the amount of money raised by the sector has risen exponentially.

However, the combination of surging interest rates and increased economic uncertainty in 2022 has forced managers to take a step back and reconsider potential deals.

Private Equity Takes a Break

By the middle of November, the value of buyout deals completed in 2022 stood at $578 billion, according to hedge fund data provider Preqin. That was around one-third lower than the total recorded for 2021.

Meanwhile, the number of new deals completed totaled 7,056, 24% lower year-on-year. The value...