Private Equity Sales Poised for Revival Under Trump’s Second Term
The private equity industry is bracing for a surge in sales of its investments, with experts predicting a return to pre-pandemic levels under Donald Trump’s second term as president.
A Shift in Sentiment
Just six months ago, uncertainty surrounding the US election outcome had many investors holding back on selling their assets. However, with the election now behind us, a significant number of groups are finally pushing forward with their plans to divest.
Easing the Log-Jam
According to Mark Benedetti, Executive President of Ardian, the current bottleneck in deals for mid-sized companies is likely to ease in the coming months. While it’s unlikely that we’ll see a return to the frenetic pace of 2021, Benedetti believes that deal volumes will revert to the levels seen in 2018 and 2019.
Record Transaction Volumes
The slowdown in dealmaking last year led to a record-breaking year for the private equity secondary market, where buyout firms can sell their investments to other funds instead of listing them on stock exchanges or pursuing traditional M&A routes. Paris-based Ardian recently closed a $30 billion fund, the largest-ever secondary fund, highlighting the growing appetite for these types of deals.
Tech Sector Sees Revival
Bejul Somaia, a partner at Lightspeed Venture Partners, notes that Trump’s election has already had a positive impact on deal activity in the technology sector. “We’ve seen a significant uptick in deals, with two of our companies signing term sheets to be acquired by US strategics at valuations between $1.5-$3 billion, and a third currently under discussion,” he revealed.
As the industry looks to the future, one thing is clear: the private equity sales landscape is poised for a significant shift, driven in part by the changing political landscape. With investors regaining confidence and deal activity picking up pace, it’s likely to be an exciting year ahead for the industry.
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