S&P Global: Private Markets Move into the Spotlight as Changing Conditions Cast a Shadow

Rhea-AI Summary

S&P Global (NYSE: SPGI) released its Look Forward: Private Markets research highlighting the growing significance of private markets in the financial sector. The report notes that private equity and venture capital-backed M&A investments peaked at over $600 billion in 2021, maintaining over $400 billion in 2022 despite a 35% decrease. Private equity was pivotal in seven of the ten largest IT M&A deals in North America last year. Furthermore, $260 billion was raised for private equity funds aimed at supporting energy transitions. The research underscores the importance of understanding private markets for future business strategies amidst changing economic conditions.

Positive

• Private equity and venture capital-backed M&A investments remained strong at over $400 billion in 2022.
• Private equity buyers were involved in seven of the ten largest IT M&A deals in North America last year.
• $260 billion raised for private equity funds to support energy transition efforts.

Negative

• Rising interest rates may pose risks to both private and public credit markets.

NEW YORK, April 18, 2023 /PRNewswire/ -- S&P Global (NYSE: SPGI) today published the latest edition in its Look Forward research series, focusing on developments in the private markets.

Private markets have become increasingly integral to financial markets and the real economy, according to the research. The number and breadth of private equity-sponsored companies has grown and the versatility of private credit has transformed it into a competitive source of funding for the leveraged finance market.

While rising rates may expose hazards in both private and public credit markets, it is expected that the private markets will remain an integral source of funding for the future, meeting the needs of new and innovative growth models as well as those of traditional large corporate M&A.

Key findings from the Look Forward: Private Markets research include:

• Global private equity- and venture capital-backed M&A investments peaked in 2021, at over $600 billion and even after a 35% pull-back in 2022 remained elevated at over $400 billion.
• Private equity buyers led seven of the 10 biggest information technology M&A deals in the US and Canada last year, the highest share recorded in the past 22 years.
• Private equity's enormous arsenal of dry powder means there is significant capital to deploy in the right conditions, the question is about its willingness to do so.
• $260 billion has been raised for private equity funds targeted to fund the energy transition, including funding that may impact the speed and shape of the transition even more than funding from public markets.

"Private markets have moved off the sidelines and into the spotlight across multiple industries and sectors. While public markets remain essential to the global economy, many companies today have grown to dominant market positions without ever engaging with public financing," said Adam Kansler, President of S&P Global Market Intelligence. "Whether we are talking about private debt or private equity, venture capital or energy infrastructure, the scale of private market financing has reached a point where knowledge of these markets is essential."

The Look Forward research series from the S&P Global Research Council aims to provide a deep dive into the most important themes that are transforming the global economy, helping decision-makers look beyond the near term and explore the trends that will shape our future.

"In a rapidly changing world in which markets transform and evolve at a pace never seen before, new risks and opportunities are constantly emerging, and established wisdom is continually challenged," said Martina Cheung, President of S&P Global Ratings and Executive Sponsor of the S&P Global Research Council. "The Look Forward journal exemplifies the role of S&P Global in powering global markets and provides the perspectives our customers need to focus on the future."

For more insights from Look Forward Private Markets (Volume 2 | April 2023), please visit: https://www.spglobal.com/look-forward/private-markets

For more information about S&P Global Research Council, please visit:https://www.spglobal.com/en/research-insights/featured/research-council 

About S&P Global
S&P Global (NYSE: SPGI) provides essential intelligence. We enable governments, businesses and individuals with the right data, expertise and connected technology so that they can make decisions with conviction. From helping our customers assess new investments to guiding them through ESG and energy transition across supply chains, we unlock new opportunities, solve challenges and accelerate progress for the world.

We are widely sought after by many of the world's leading organizations to provide credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help the world's leading organizations plan for tomorrow, today.

Media Contact

Christopher Krantz
Tel: +44 79 7663 2658
christopher.krantz@spglobal.com 

Nadja Jiang
nadja.jiang@spglobal.com 

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SOURCE S&P Global

FAQ

What are the key findings of S&P Global's Look Forward: Private Markets report?

The report highlights that private equity and venture capital-backed M&A investments peaked at over $600 billion in 2021 and remained elevated at over $400 billion in 2022, with significant involvement in IT deals and substantial capital raised for energy transition.

How did the private equity market perform in 2022 according to S&P Global?

Despite a 35% pull-back in 2022, private equity-backed M&A investments remained strong, exceeding $400 billion, indicating resilience in the sector.

What challenges do rising interest rates pose for private markets as noted by S&P Global?

Rising interest rates may expose potential hazards in both private and public credit markets, impacting future funding conditions.

How much capital was raised for private equity funds focused on energy transition?

S&P Global reported that $260 billion has been raised for private equity funds aimed at supporting energy transition initiatives.