PitchBook News - GPs cooking up a PE exit recovery

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The Weekend Pitch

July 7, 2024

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

(Joey Schaffer/PitchBook News)

We're still waiting for the long-anticipated PE exit recovery, but deal advisers tell me GPs are busy cooking up plans to offload their fully baked assets as pressure mounts to return capital to LPs.

Market chatter at the start of the year indicated the pipeline of exits was filling up, there were more assets up for grabs and the credit market had a strong appetite for financing high-quality deals.

However, more than halfway through the year, reality has fallen short of those predictions. Exits have not accelerated at the speed everyone hoped for. In fact, they've barely moved at all.

In the first half of 2024, overall US PE exit value reached $141.2 billion, almost flat from the year earlier; the total exit count showed only a slight year-over-year increase of 1%, PitchBook data shows.

Factors hindering the recovery in exit flow include a persistent valuation gap between buyers and sellers, election uncertainty and high interest rates.

Behind the scenes, though, these advisers note signs of increased activity around sale preparations, a motivation to close deals quickly and a willingness among sellers to take on more risk.

I'm Madeline Shi and this is The Weekend Pitch. You can reach me at madeline.shi@pitchbook.com or @Madelin94615831 on X.

Trivia

Investors are continuing to invest in the gaming space despite a difficult backdrop, with a renewed interest in Web3. Which of the following firms, according to PitchBook data, has been the most active VC investor in the space since 2019?

A) Tencent Investments
B) Play Ventures
C) Andreessen Horowitz
D) Bitkraft Ventures

Find your answer at the bottom of The Weekend Pitch!

Don't call it a comeback for VC yet

(Metamorworks/Getty Images)

Two years into the market slowdown, VC dealmaking has remained surprisingly resilient. Deal counts have risen for three consecutive quarters, according to PitchBook estimates, and median valuation figures have risen too. On their own, these trends point to a return of market strength, but alongside the poor exit environment, it could be that even strong companies are finally being pushed to raise more capital.

There's still plenty of time left in 2024 for GPs to see a reversal of their fortunes. Check out our mid-year review of the VC industry with our First Look data packs for the Q2 2024 PitchBook-NVCA Venture Monitor, Q2 2024 European Venture Report and Global Venture Capital dataset.

PE take-privates mount a recovery

(Ipuwadol/Getty Images)

Total take-private deal value in North America and Europe topped $61 billion in Q2, a fourfold increase over the prior quarter. The period included Silver Lake's acquisition of Endeavor, the largest take-private in 10 years at $25 billion in enterprise value.

Exit value in the US has tracked solidly, as many firms have secured deals through partial exits, continuation funds and rolling minority stakes. Our Q2 2024 Global PE First Look data packs precede the release of our quarterly US and European PE Breakdown reports, covering trends for dealmaking, exits and fundraising.

Global policies steer VC dollars toward battery recycling

(Alengo/Getty Images)

As the need for decarbonization solutions grows, carbon and emissions tech startups seem to have weathered the challenging market conditions across the VC landscape. But following a blockbuster year in 2023, deal value is down across the sector, with $2.7 billion invested in Q1 2024, according to our latest Emerging Tech Research.

Lithium battery recycling startups drew the largest share of VC funding—as they continue to navigate changing regulations and standards for battery use, development and disposal. These companies, like others in the sector, are consistently affected by global policy and varying political landscapes.

Quote/Unquote

"We have the ability to take our time and get this right."

—Federal Reserve Chairman Jerome Powell, talking about potential interest rate cuts at the European Central Bank's annual conference in Portugal.

Stay tuned

Keep an eye out for these insights and research reports coming out this week:

Q2 2024 DefenseTech Vertical Snapshot Update
Q2 2024 US PE Breakdown
Q2 2024 PitchBook-NVCA Venture Monitor
Analyst Note: PE Investment in Healthcare

Trivia

Answer: D)

Bitkraft Ventures is the most active VC investor in the gaming vertical according to PitchBook data. You can see who else made the top 10 list here.

This edition of The Weekend Pitch was written by Madeline Shi and Jacob Robbins. It was edited by Heather West and Ron Prichard.

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PitchBook News - GPs cooking up a PE exit recovery

Trivia

Don't call it a comeback for VC yet

PE take-privates mount a recovery

Global policies steer VC dollars toward battery recycling

Quote/Unquote

Stay tuned

Trivia

Older messages

The outlook for H2

Funding falls for women founders

Ranking gaming's most active VCs

Don't call it a comeback for VC—yet

USV keeps it simple with $275M target

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