Overview

We expect that activity will be driven by elevated levels of secondary (ie PE-to-PE) transactions. In addition, PE sponsors that are holding onto assets that have either reached or passed their natural maturity date will take advantage of the improved exit conditions by looking to sell assets, with formal auction processes continuing to be the dominant path to exit. While PE vendors are unlikely to command the sky-high valuations of 2021, the improved confidence amongst bidders means that those looking to sell high-quality businesses should achieve strong multiples from cashed-up buyers. Exit preparedness will, therefore, be a key focus this year (as summarised in more detail below).

On the buy-side, PE dealmakers will likely face fierce competition from other private capital providers, including infrastructure and core plus funds with lower costs of capital. Based on our intel, at least five assets worth north of $1 billion are slated for sale in the first half of 2024, providing PE sponsors with plenty of opportunities to invest meaningful amounts of equity across a range of sectors. We expect that the elevated levels of take-private transactions that have buoyed buy-side activity in the last five years will slow in 2024, as runaway valuations in the public markets make it increasingly difficult to secure recommendations from target boards. Hostile takeover bids by PE-backed bidders (which allow the buyer to eschew the target board entirely) will continue to be rare.

While we expect some turbulence as the Australian economy navigates its path to the much talked about 'soft landing', PE sponsors who can identify the right asset and move quickly are likely to be rewarded, particularly as the global economy starts to recover. After all, fortune favours the brave.