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- Higher interest rates pose challenges for private equity portfolios, but there is some reason for hope
- What stands out in such a mixed group?
With interest rates and the cost of borrowing rising in recent years, times have looked more challenging for private equity investors. Such uncertainty, inevitably, has fed through into investor behaviour.
That's reflected quite clearly by a drop-off in the level of asset sales within the sector. While 2021 saw record highs in terms of the volume of asset sales, such dealmaking stalled in 2022 and 2023 as the unstable macroeconomic environment and increased costs of capital took their toll. The value of exits fell from $1tn in 2021 to $616bn in 2022 and $309bn in 2023, according to figures from Bain & Company.