McKinsey recorded a recovery in the private equity market last year.

After two years of uncertainty, the private equity (PE) market began to show signs of recovery in 2024. The main drivers were an increase in the number of deals, a rise in investment exits, and a decrease in financing cost. However, the investment industry has not overcome all of its challenges and remains cautious, with the structure evolving under the influence of new market factors that are prompting change, according to a McKinsey & Company study.

It is reported that the total value of deals increased by 14%, reaching $2T, making 2024 the third most active year in the history of private equity. Large deals of over $500M jumped by 37%, led by the return of major investors. The driver behind this growth is better financing conditions – lower lending rates are stimulating large buyout deals. This reflects a restoration of market confidence among major players prior to a period of turbulence.

In Europe, public-to-private (P2P) transactions grew by 65%, signaling growing interest in public buyouts. Additionally, the share of private investors and prominent clients who previously lacked access to PE investments also increased last year.