Resilient sectors and technology provide opportunities as pressure builds to deploy capital

In Q2 2023, the European private equity market continued to remain depressed given tough macroeconomic conditions and persisting high financing costs. However, amidst this backdrop, handfuls of assets in resilient sectors (particularly Infrastructure Services, Industrials and IT Services), continued to transact. Fundraising across the continent remains challenging, however, the continued resilience in fundraising for megafunds is further evidence for the growing preference of LPs to deploy larger cheques into larger fund vehicles. 

Ultimately, we anticipate that the European private equity market will remain subdued for the remainder of 2023 as inflation and interest rates in Europe continue to remain sticky. However, with significant dry powder still available in the market, sponsors will come under increasing pressure to deploy capital and to keep on track with investment curves. This sentiment suggests that we could experience a busier H1 2024, as sponsors look to deploy capital into processes they have spent significant time prepping for throughout the remainder of 2023.

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