Private equity and venture capital businesses fall 56% in June
Startups and developing businesses miss funding opportunities as industry optimism drops
The transactions of private equity and venture capital global prices plummeted last month.
The value of deals dropped 56% in June from the same month a year ago, while the number of announced transactions dropped 33%, according to an S&P Global Market Intelligence report published Tuesday.
Investors are pulling back after pouring billions of dollars into buyout funds and startups in the last years. The reversal is being driven by a market crash that has shrunk the fund’s coffers, making them more reluctant to allocate money to assets that are difficult to sell and value.
Funds from giants like Tiger Global have seen their returns diminish as they cut back on some venture capital investments. California’s civil servants’ retirement system, the largest US pension fund, earlier this month walked away from a series of private equity holdings.
The S&P report shows that technology, media and telecommunications accounted for $28 billion of private equity and venture capital deals in June, a sharp decline from $48 billion in June 2021. The healthcare sector was a hardest hit sectors, with transactions falling 79% last month.
Marco De Benedetti, co-head of the Carlyle Group’s European private equity unit, said last month that the sector’s most optimistic days are waning.
“We’re seeing a definite slowdown right now,” he said in an interview with Bloomberg TV. “I think the peak is behind us.”