S&P Global Market Intelligence has issued a report indicating that venture capital (VC) and private equity (PE) investments may be rebounding. The past couple of years have been challenging for the private securities markets, with many sectors, like Fintech, retrenching.
According to S&P’s data, global PE and VC investment activity in May grew 29.2% to $61.73 billion from $47.56 billion in the same month in 2023.
Total deal value year to date for 2024 has totaled $251.11 billion, up 17.9% year over year. At the same time, the number of deals declined to 4,988 from 5,451 in May 2023. So fewer deals but large deal amounts.
The report states that the US and Canada had the highest deal value in May, generating $31.65 billion, compared with $24.51 billion in the same month a year ago.
Private equity investments in Europe rose to $24.99 billion from $10.68 billion year over year, while deal value in Asia-Pacific dropped 58.4% to $4.55 billion.
S&P says that technology, media, and telecom have experienced the most deal activity, with 335 private equity transactions in May.
Interestingly, artificial intelligence (AI) was not broken down in the report as AI is one of the hottest sectors in tech today.
A bigger question is this the start of a trend or a temporary respite. Inflation continues to plague global economies and geopolitical risk is exceptionally high. If inflation starts a consistent downtrend and strife around the world declines, perhaps we will see another innovation and entrepreneurship boom.
