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Creativity amid adversity

Private Equity General Partners are responding to a challenging market environment with ingenuity and innovation

Private equity firms have been experiencing a challenging fundraising environment against a backdrop of high interest rates, resulting in slower exits. Nonetheless, many of our mega-fund clients have succeeded in fundraising through consolidation efforts. “We believe that challenges in the fundraising environment, coupled with other factors such as succession, will dramatically impact the shape of the industry going forward”, says Deloitte’s Global Private Equity Leader, Emma Cox.

Bryant Huber, Private Equity Leader at Deloitte United States remarks “We are seeing General Partners expanding into new asset classes…This is all part of the transition from private equity firm to true asset manager”.

M&A at the General Partner (GP) level is at an all-time high due to diversification into new strategies and geographical expansion. However, GPs engaged in M&A need to consider the choice of integration or structural and operational segregation and, carefully evaluate revenue and cost synergies against what is best for both organizations as they come together. It is critical to design an appropriate new governance model that truly meshes the strategy, culture and talent of both firms, whilst championing for key talent.

Overall, the private equity industry has demonstrated sustained and successful performance, and firms are adapting and innovating in response to change. Read our latest insights on Creativity amid adversity featured in Private Equity International’s special report.

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