Despite a positive market mood driven by a gradual recovery in operations, 2024 is unlikely to be a year of big mergers, major deals, or multi‑partner takeovers. A majority of surveyed professionals expect any sustained surge in large transactions to arrive in 2025. Industry voices note that those operations would benefit from clearer financing conditions once interest rates stabilize at a higher plateau. Leading M&A advisor Ignacio Hornedo of Allen & Overy suggests that the maturity timeline of several investments and the presence of club deals—transactions involving two or more private equity firms—could provide the certainty needed to reactivate large-scale activity in the near term. This outlook holds for the 2024 segment as well. [Citations: Corporate Finance Review]
In the first half of the year, private capital activity contracted by about 46%, totaling up to 3 billion euros, according to SpainCap (the private‑capital employers’ association, formerly Ascri). Among those surveyed, 77% attributed the decline in deals to a combination of macroeconomic uncertainty, structural shifts within companies, and higher financing costs. In North American and Canadian markets, similar dynamics have been observed as capital providers calibrate to inflation and geopolitical risks, with a noticeable shift toward more selective deployments and longer investment horizons. [Citations: Capital Markets Survey]
Across the sector, general partners, the managers of funds in venture capital and related vehicles, indicate that the drop aligns with expectations: 52% say results matched what they anticipated, while 33% felt outcomes were worse than expected. The quarter that saw the sharpest pullback was Q1, described as “very challenging” by Noelle Cajigas, a KPMG Deal Advisory partner, yet the year gradually improved as conditions stabilized and market participants adapted. [Citations: KPMG Deal Advisory Report]
Debt funds, big winners
At the conference, private‑capital managers emphasized the growing role of debt funds and the need to diversify financing sources, highlighting expected returns in the 9% to 9.5% range. The research indicates that 71% of managers believe such instruments exist and can be scaled. The period of financial stagnation has allowed the sector to build an attractive alternative that is likely to become more important over the medium term. [Citations: Investment Outlook]
Private debt is viewed as an attractive product because it blends appealing risk‑return characteristics. There is talk of a golden age for private debt, yet investors remain highly selective. The most established managers, who maintain disciplined investment processes, tend to capture the majority of opportunities. Pablo Burgos, debt director at the management firm ICG, noted this dynamic during CAPCorp. [Citations: Debt Markets Commentary]
Double-digit returns
A recent EY study conducted with SpainCap shows private equity funds placed in 2022 achieved an average net return of 11.3%, modestly higher than 2021. This performance significantly outpaced many traditional asset classes in North America and Canada, including equities, fixed income, and government debt, as well as hedge funds and real estate. Venture capital funds posted even stronger figures, with returns around 12.8% and 11% in the same period, while vehicles with an impact focus reached about 14%. This trend reflects ongoing maturation and the growing efficiency of portfolio construction in diverse markets. [Citations: EY SpainCap Report]