Although the market is positive with the recovery in operations, 2024 will not be the year of major operations or ‘big deals’. Two out of every three people interviewed think we will have to wait until 2025 to see them again. “These operations will benefit from greater predictability in financing costs once interest rates reach their ceiling,” the congress organization said. Ignacio Hornedo, M&A partner at Allen & Overy, points out that the maturity of many investments or the number of ‘club deals’ (acquisitions by two or more private equity firms) could perhaps “provide the necessary certainty for this to be reactivated” by 2024 segment along”
Investment in the first semester private capital market contracted by 46%Up to 3 billion euros, according to data from the privately-owned employers’ association SpainCap (formerly Ascri). 77% of those surveyed said the main reason for the decrease in operations was “general decline in valuations in the face of macroeconomic uncertainties, structural changes in companies and increases in financing costs.
Generally, GPs (General Partners), the acronym by which venture capital fund managers are known, consider: The contraction in investments is consistent with expectations: 52% believe it behaved as predicted and 33% think the outcome was less than expected. The period of the year with the greatest contraction in operations was the first quarter, which Noelle Cajigas, KPMG partner in charge of Deal Advisory, described as “very challenging,” but then “the year gradually improved.”
Debt funds, big winners
At the congress, managers of the private capital sector emphasized the following: The importance of debt fundsOffering returns between 9% and 9.5%. According to the research, 71% of managers believe that such tools exist.We managed to take advantage of the stagnation of traditional finance to build an alternative that will continue to gain importance in the medium term”.
“Private debt is an attractive product because it offers an attractive risk-return combination. There is already talk of a golden age of private debt. Despite this, investors are very selective, and the most established managers who know how to maintain greater discipline monopolize the bulk of investments. Donation “(capital raise),” Pablo Burgos, debt director at management company ICG, said during CAPCorp.
Double digit returns
According to a recent report conducted by consultancy firm EY in collaboration with SpainCap, Average net return of private equity funds Placed in 2022 11.3%It’s slightly higher than the return they got in 2021. This return far exceeds the return on other financial assets such as the stock market, fixed income bonds, and government bonds. hedge funds or the real estate industry. Now, funds venture capital They improve performance compared to ‘private equity’They returned 12.8% and 11% respectively, while impact vehicles reached 14% last year.