Only 150 private equity funds closed in the first quarter of 2024 — the lowest such figure recorded in any quarter since 2018 — and a 37% plunge from the first quarter of 2023, according to Preqin’s private equity update issued April 30.
However, the $166.8 billion aggregate capital raised in the quarter marked only a 6% year-over-year decline, suggesting the trend toward industry concentration continues unabated.
North America accounted for 90 fund closings in the first quarter of 2023 — or 60% of the total — Europe had 45 funds (30%) and the Asia-Pacific region had 11 funds (7.3%).
The APAC figure marked the lowest number of closings for that region since 2018. However, despite this decline, Preqin thinks the APAC region “remains resilient for private equity as China buyout transactions were up in the fourth quarter of 2023, private equity deals surged at year-end, and Chinese private equity exits are also on the rise.”
Deal sizes are getting smaller, Preqin data showed. The first quarter of 2024 witnessed 1,780 deals and $94.7 billion in raised capital. By comparison, in the first quarter of 2018, there were 1,790 deals, but they raised an aggregate of $153.5 billion. This trend, Preqin noted in the report, “implies that new deal activity appears to be finding a support level after a quarter-on-quarter decline, while deal sizes are being smaller this year.”
Exit deal activity is slowly recovering from a year ago, but down from the fourth quarter of 2023, Preqin said. In the first quarter of 2024, there were 358 exits, down from 452 in the fourth quarter, but up about 5% from 342 in the year-earlier quarter, suggesting that “exit deals through secondary buyouts have become larger.”
The aggregate value of exits totaled $54.2 billion in the first quarter of 2024, up 40% from the year-earlier period, but down 57% from the fourth quarter of 2023. Secondary buyouts were the main driver of increased year-over-year exit activity, Preqin said, while trade sales and sales to management remained relatively unchanged over the 12-month period.
