PE Pulse: Five takeaways from 2Q 2022

In this episode, Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 2Q 2022 that are top of mind for PE investors.

Related topics Private equity

PE Pulse is a quarterly report and corresponding podcast miniseries that provides analysis and insights on private equity market activity and trends.

Visit the Private Equity 2Q report to view this quarter’s summary and infographic.  

Companies of all sizes may need to continually assess where outsourcing can create value for stakeholders. Areas that are not core value-creating activities and those where the company lags in technology or cost efficiency can be strategic outsourcing candidates. 

Five takeaways from 2Q 2022:

  • The environment has changed pretty dramatically since the last time we did this back in March – inflation in the US and Europe has spiked to about 8-8.5%; we expected that interest rates would move higher, and now they; and global markets heading into widespread corrections, and in some cases – the US notably, actually moving into bear market territory.
  • PE deal activity decreases 27% from 1Q 2021: despite a softening in activity from the breakneck pace of last year, this level of activity is still quite robust.
  • From a fundraising perspective, we’ve seen declines of a similar magnitude – down about 15% in the first half of this year versus last.
  • Valuations have risen monotonically in recent years, they topped out at about 11.5x last year, and a lot of deals – especially in the tech space and with growth equity deals – trading much higher.
  • PE firms still have US$1.2t in dry powder, so they’re not going to be capital constrained. LPs are committed to the asset class and are not market timers – they’re going to continue to do their best to invest at a steady pace.  

So, to wrap it up – market volatility, inflationary pressures, and rising interest rates certainly make the landscape a lot different than it was six months ago. That said, we think that firms will stay active despite the increased uncertainty.

For your convenience, full text transcript of this podcast is also available. Read the transcript.

Presenters

Pete Witte
EY Global Private Equity Lead Analyst

Podcast

Episode 53

Duration 10m 00s

In this series

Series overview
(Event List - Manual)

PE Pulse: Five takeaways from 2Q 2022

In this episode, Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 2Q 2022 that are top of mind for PE investors.
Podcast

Episode 53

Duration
10m 00s

Presenters

Pete Witte

EY Global Private Equity Lead Analyst

How Brightstar balances value and values when implementing ESG

In this episode of EY NextWave Private Equity podcast, the speakers explore how operating executives can effectively communicate the value prop of ESG at the portco level.
Podcast

Episode 52

Duration
24m 00s

Presenters

Maha Eltobgy

Chief Sustainability Officer and Managing Director, Brightstar Capital Partners

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

How geopolitical power shifts will affect investment opportunities

In this episode of EY Next Wave Private Equity Podcast, the speakers discuss how shifts in geopolitical power will affect growth and investment opportunities.
Podcast

Episode 51

Duration
24m 00s

Presenters

Famke Krumbmüller

EY EMEIA Leader, Geostrategic Business Group

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

What ESG means to KKR

In this episode, the speakers discuss why KKR views ESG as a business opportunity that both creates and protects value over time.
Podcast

Episode 50

Duration
24m 00s

Presenters

Elizabeth Seeger

Managing Director, Sustainable Investing, KKR

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

What’s in store for SPACs

In this episode, the speakers explore why SPACs remain highly relevant despite market volatility and regulatory headwinds.
Podcast

Episode 49

Duration
30m 00s

Presenters

Karim Anani

EY Americas Financial Accounting Advisory Services Transactions Leader; SPAC Co-Leader

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

How today’s economic rebalancing is impacting PE

In this episode, the speakers discuss how macroeconomic factors such as inflation, monetary policy, and the labor shortage will impact PE investment decisions and theses.
Podcast

Episode 48

Duration
23m 00s

Presenters

Gregory Daco

EY-Parthenon Chief Economist, Strategy and Transactions, Ernst & Young LLP

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

PE Pulse: Five takeaways from 1Q 2022

In this episode, Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 1Q 2022 that are top of mind for PE investors.
Podcast

Episode 47

Duration
10m 00s

Presenters

Pete Witte

EY Global Private Equity Lead Analyst

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

What PE is outsourcing to create value

In this episode, the speakers discuss what tasks PE is outsourcing across business functions such as finance, IT, HR and customer service to create value.
Podcast

Episode 46

Duration
20m 33s

Presenters

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader