Sponsor consolidation is likely to accelerate in response to challenging fundraising conditions, according to sources cited in the FT’s Private equity is in for rampant consolidationpublished this week. From our vantage, while not covered in the article, rising compliance costs in the wake of the SEC’s proposed private funds rule is likely to disadvantage middle-market sponsors and accelerate sponsor M&A.
Goldman Sachs Asset Management raised $14.2 billion for its Vintage IX fund, exceeding the target of $12 billion for the seondaries fund. Reuters covered the fund close here.
Reliance on NAV loans has increased as leveraged lending costs have increased and exits have slowed. New entrants in the lending market have included a number of non-banks entities. See the FT’s Defending the portfolio’: buyout firms borrow to prop up holdings.
“You don’t want to be a second mover in AI,” according to Blackstone’s Steve Schwarzman, who continues, “If someone has already improved their company and you haven’t, the improved company will be a formidable competitor, much more than it is today.” The comments, made at the IPEM summit in Paris this week highlights the rapid move to integrate technology into internal processes at PE firms. Last week the Wall Street Journal highlighted the industry demand for data science and engineering talent.
Year-to-date corporate bankruptcies in the U.S. surpassed full-year totals for both 2021 and 2022 as companies come to terms—or fail to come to terms—with higher financing costs, according to S&P Global Market Intelligence.
