In May, the private equity sector witnessed a drop in total disclosed deal volume, with a month-over-month decrease of around 50%. Most of these deals (over 70%) were in the $10 million to $100 million range with the B2B industry the leading beneficiary of capital investments, representing approx. 37.7% of the total.

Add-on activity continues to be the primary driver for overall deal volume, as more emphasis is placed on market consolidation and generating returns via operational improvements. Add-ons generally demand less leverage compared to platform investments, which indicates the impact of costlier and more challenging credit procurement.

On a related note, we have observed longer deal cycles leading to fewer mid-market transactions. Simultaneously, our clients have shown an increased interest in corporate development roles, often seeking our expertise throughout transaction lifecycles, specifically in post-merger integration. This pattern could signal heightened activity in 2025 as interest rates diminish.

With interest rates expected to decline in the latter half of 2024, there is likely to be a decrease in the low exit activity. Consequently, this ongoing trend has maintained a significant disparity between capital calls and distributions to investors.