I am very pleased to introduce the 10th annual edition of our Private Equity Market Insights series. Each year, we use our unique position in the market as adviser on private equity M&A transactions to analyse the key features of deals, identify current market trends, and to assess potential developments on deal terms. We also collate other market insight from across our specialist teams to make sure our clients and contacts are fully up to date on current and future issues affecting the industry.
The past year was difficult for the country generally with the cost of living crisis and political uncertainty dominating the domestic agenda and ongoing war in Ukraine the main concern internationally. As predicted early last year, these issues led to a slowing down of the M&A market as high debt finance costs and lack of liquidity in the debt markets resulted in increasingly challenging economic circumstances in which to execute leveraged buyouts.
It has however been remarkable to see the often referenced resilience of the asset class in action given those broader headwinds. Funds have continued to find ways to do the right deals (particularly in the software, financial services and healthcare sectors), often through creative consideration structures, and GPs have continued to find liquidity options for LPs within their structures. We expect that as interest rates settle towards the middle of 2023 deal activity will start to increase again.
The Travers Smith Private Equity team have once again advised our broad roster of sponsor clients on a range of international transactions. We were also proud as a team to raise funds for Medicines Sans Frontieres and Place2Be by walking, running and cycling the distance from Lands End to John O Groats on a sunny afternoon in Richmond Park in October.
The ever-present need to deploy capital within the industry combined with increasing creativity and a shifting macro-economic and political backdrop suggests that 2023 will continue to be an interesting year in private equity M&A.
