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PE deal activity down for fifth consecutive quarter

The first quarter of 2023 marked an unprecedented fifth consecutive quarter of pull-backs in private equity investment, according to a report by Bloomberg.

M&A deals slumped to $559 billion across 12,200 deals during Q1 this year – the third-lowest M&A deal volume in a single quarter this decade. Almost $182 billion of that amount – spanning some 4,200 deals – involved at least one PE firm. This represents a 17% decrease in the volume of private equity deals from $218.7 billion in Q4 2022, and a 59% pullback from the $439 billion invested in Q1 2022.

Meanwhile, about 2,900 of the first-quarter PE investments were venture capital deals, worth $80.1 billion. Q1’s VC deal volume grew 6% from $75.3 billion in Q4 2022 – but declined 53% from Q1 2022.

Despite the increase in volume, VC deal count in Q1 2023 was down 7% from Q4 2022 and down 40% from Q1 2023.

Overall, no other drop in the aggregate volume of PE-backed deals has ever run longer than three quarters.

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