09 Feb 2023
TOOLS
Login to access your documents and resources.
Investment outlook
Looking ahead: Opportunity in middle market private equity
After a decade with interest rates near zero, investors are now pivoting from a world of abundant capital to a tightening market for financing. With worries of recession, rising rates, inflation, geopolitical conflict and more, private equity managers in the U.S. middle market are bracing for continued macroeconomic uncertainty in 2023.
Our private equity teams have developed a strategy to navigate the year ahead and we anticipate greater use of equity co-investment to right-size transactions. In our many discussions with U.S. middle market private equity sponsors (GPs) and fellow investors (LPs), we identified the questions top of mind for all.
Five Questions for 2023:
- Should LPs continue to support the U.S. middle market when large buyouts may show lower dispersion of returns?
- What are your expectations for the dealmaking environment in 2023?
- Are private equity portfolio valuations due for a downgrade?
- The pace of change has accelerated in all areas, from deal flow, to fundraising, to co-investment processes. How do you see this dynamic creating opportunity?
- When investors look back at industry growth, technology and healthcare have been clear winners over time. Looking ahead, what sectors will remain attractive?
Private capital can play an important role in portfolio construction as it helps create new exposures within a traditional portfolio while also increasing overall return potential.
Related articles
Alternatives
A good time for private debt
Churchill’s Ken Kencel on private debt fundraising and why large private credit managers are best placed to prosper in the current macro environment.
Investment outlook
Looking ahead: U.S. private credit in an age of scarcity
For over a decade, including through COVID-19, the tide of capital has flowed mostly in one direction: into markets.
Alternatives
ESG data takes centre stage
Churchill’s Mickey Weatherston discusses ESG integration, performance assessment, data priorities, and the need for a harmonized industry approach.
Our offices