Key Takeaways
- • Private debt funds financed 77% of private equity-backed leveraged buyouts globally in 2024, their largest share in at least a decade, according to an S&P Global Market Intelligence analysis of Preqin data.
- • Banks financed 23% of LBOs in 2024, their lowest share by volume since at least 2015.
- • Private debt funds financed 83% of the 53 LBOs announced globally between Jan. 1 and Jan. 22, 2025, indicating the trend gained momentum early in the year.
- • Asia-focused private equity and venture capital fundraising fell to $63.79 billion in 2024, a 29% decline from the prior year and a 12-year low, per Market Intelligence data.
- • Blackstone and KKR expect more active M&A and fundraising in 2025, with Blackstone's Jonathan Gray calling private equity activity "definitely going to be stronger."
Summary
Private debt funds financed 77% of leveraged buyouts globally in 2024, according to an S&P Global Market Intelligence analysis of Preqin data, marking their largest share of private equity-backed LBO financing in at least a decade. Banks financed the remaining 23%, their lowest share by volume since at least 2015. Lending to private equity is private debt's core business, but regulatory pressure on banks and private debt funds' speed advantage in servicing deals have shifted the balance further toward the funds.
The trend appears to have strengthened in early 2025. Private debt funds financed 83% of the 53 LBOs announced globally between Jan. 1 and Jan. 22.
Separately, fundraising for Asia-focused private equity and venture capital funds dropped to a 12-year low in 2024. Funds targeting Asia raised $63.79 billion, a 29% decline from the prior-year total. Siew Kam Boon, head of private equity practice in Asia-Pacific at Hogan Lovells, told Market Intelligence that US restrictions on some technology investment in China and a difficult exit environment contributed to the decline.
Among recent deals, Warburg Pincus and Berkshire Partners agreed to acquire aerospace and defense spare parts company Triumph Group at an enterprise value of about $3 billion, paying $26 per share in cash, a premium of about 123% to the unaffected closing price on Oct. 9, 2024. TPG, through its TPG Rise Climate Transition Infrastructure strategy, agreed to buy Altus Power in an all-cash transaction valuing the solar company at about $2.2 billion including debt. Bain Capital agreed to buy an about 51% stake in Milacron from Hillenbrand for $287 million. Cherry Ventures raised $500 million across two funds, and Northcote Equity closed its inaugural fund at £160 million.
Looking ahead, Blackstone and KKR expect more active M&A in 2025 according to their fourth-quarter 2024 earnings calls, despite uncertainty around the policies of the new US administration. Blackstone President Jonathan Gray said buoyant public markets and M&A momentum are opening a path for more exits, while KKR co-CEO Scott Nuttall said 2024's dealmaking momentum will likely continue and fundraising is expected to pick up. Nuttall noted that the US election temporarily slowed deal activity in the second half of 2024 and that background noise will likely grow louder in 2025.
The trend appears to have strengthened in early 2025. Private debt funds financed 83% of the 53 LBOs announced globally between Jan. 1 and Jan. 22.
Separately, fundraising for Asia-focused private equity and venture capital funds dropped to a 12-year low in 2024. Funds targeting Asia raised $63.79 billion, a 29% decline from the prior-year total. Siew Kam Boon, head of private equity practice in Asia-Pacific at Hogan Lovells, told Market Intelligence that US restrictions on some technology investment in China and a difficult exit environment contributed to the decline.
Among recent deals, Warburg Pincus and Berkshire Partners agreed to acquire aerospace and defense spare parts company Triumph Group at an enterprise value of about $3 billion, paying $26 per share in cash, a premium of about 123% to the unaffected closing price on Oct. 9, 2024. TPG, through its TPG Rise Climate Transition Infrastructure strategy, agreed to buy Altus Power in an all-cash transaction valuing the solar company at about $2.2 billion including debt. Bain Capital agreed to buy an about 51% stake in Milacron from Hillenbrand for $287 million. Cherry Ventures raised $500 million across two funds, and Northcote Equity closed its inaugural fund at £160 million.
Looking ahead, Blackstone and KKR expect more active M&A in 2025 according to their fourth-quarter 2024 earnings calls, despite uncertainty around the policies of the new US administration. Blackstone President Jonathan Gray said buoyant public markets and M&A momentum are opening a path for more exits, while KKR co-CEO Scott Nuttall said 2024's dealmaking momentum will likely continue and fundraising is expected to pick up. Nuttall noted that the US election temporarily slowed deal activity in the second half of 2024 and that background noise will likely grow louder in 2025.
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