PE/VC-Backed Exits: half a year overview
Despite a recent decline in volatility over the past few quarters, economic activity has not yet shown signs of a strong recovery. The IPO market has been stagnant due to a lack of new offerings for several months.
However, there is growing optimism among investors, as less than 20% of respondents believe that the market will worsen by the end of the year. But still, most of the fund managers believe that it will take more time for markets to improve at least until the beginning of the next year.
In the short term, public exits are expected to remain under pressure, making acquisitions the preferred exit strategy. In 2023, US M&A deals and buyouts account for a significant 98% share of all exits, marking the highest percentage in the last two decades. This trend is likely to continue, with more than 70% of surveyed investors anticipating their next meaningful exit will be through an acquisition.
However, acquisitions are still projected to decrease this year, with US VC-backed M&A activity expected to be 23% lower than the previous year, and US buyout deals on track to be 32% lower than in 2022, reaching their lowest totals since 2013 and 2017, respectively.