Mega-buyout deals are becoming increasing difficult to execute due to problems in “getting the equity”, according to Orlando Bravo, the billionaire co-founder of software and tech-focused private equity investment firm Thoma Bravo.
A report by BNN Bloomberg cites an interview with Bravo on the sidelines of this week’s IPEM private capital conference on Cannes, France, during which he highlighted the issues including monetary tightening on the part of the US Federal Reserve and other central banks leading to increased borrowing costs, and falling equity values making it more difficult for buyers and sellers to agree on deal prices.
According to data compiled by Bloomberg, private equity transactions have fallen by about 30% so far in 2022 having hit a record high 2021. Despite the decline though, the YTD volume of $992 billion remains high when compared with historical averages.
