Source: PitchBook’s Q2 2024 US Public PE and GP Deal Roundup
Introduction:
The second quarter of 2024 has marked significant developments in the US private equity (PE) and general partner (GP) landscape. With evolving market conditions and a shift in industry dynamics, investors and wealth managers must stay informed. This article provides a detailed analysis of the latest trends from the Q2 2024 US Public PE and GP Deal Roundup, offering you clear and actionable insights into the current state of private equity.
Private Equity Performance: Stabilization and Context
During Q2 2024, the performance of private equity strategies among leading firms showed signs of stabilization. Median gross returns for these strategies were reported between 7.9% and 11.3% on a trailing 12-month (TTM) basis. Although these returns are below public equity benchmarks, such as the S&P 500’s 24.6% TTM return, PE continues to stand out as a resilient asset class over long periods, particularly on 10- and 15-year horizons.
Deployment Activity: Recovery in Progress
Q2 2024 saw a notable recovery in private equity deployment, with major firms deploying $11.3 billion, a 40.9% increase from the previous quarter. This improvement, however, comes after a challenging Q1, leaving year-to-date (YTD) deployment down by 23.2%. Key players like Blackstone, KKR, and TPG led this recovery, with Blackstone achieving its highest deployment levels in over two years.
Fundraising Momentum: Strong Growth Driven by Strategic Acquisitions
Fundraising across all private equity strategies continued to grow, with a 43.7% increase in H1 2024 compared to the same period in 2023. This growth is largely attributed to strategic acquisitions such as KKR’s purchase of Global Atlantic and TPG’s acquisition of Angelo Gordon. Despite adjusting for these acquisitions, organic fundraising showed robust growth, up by 40% YTD.
GP Deal Activity Boost Industry Consolidation
General Partner (GP) deal activity surged in Q2 2024, with deal flow on track to surpass the previous record set in 2021. Deal count has increased by 84% YTD, reflecting a significant industry consolidation phase. This year alone, $316 billion in assets under management (AUM) have been involved in these transactions, pointing to a consolidation trend reshaping the industry landscape.
Private Credit: Outperformance Over Private Equity
Private credit strategies have outpaced private equity in terms of returns during 2024. The median TTM gross return for private credit strategies was 16.4%, significantly higher than the 7.9% median return for private equity. This outperformance reflects the growing appeal of private credit, particularly for investors seeking lower volatility and stable returns.
Conclusion:
The Q2 2024 US Public PE and GP Deal Roundup reveals a market in transition, characterized by the stabilization of private equity performance, a recovery in deployment, and strong fundraising momentum. The ongoing consolidation among GPs and the outperformance of private credit suggest that the private equity landscape will continue to evolve, offering both challenges and opportunities for informed investors. Staying on top of these trends will be important for wealth managers and investors looking to optimize their strategies in this dynamic market.
