Risk capital is experiencing a period of heightened risk, it seems, as venture capital (VC) and private equity (PE) financed firms have registered all-time high bankruptcies, according to S&P Global Market Intelligence data.
S&P reports that bankruptcy filings made by US companies backed by PE and VC climbed more than 15% to 110 in 2024, the highest annual total on record, according to their data.
Overall, S&P claims that bankruptcies in the US increased by 9.3% year over year, or 694 firms.
More than half of the 110 bankruptcy filings made by PE and VC-backed companies in 2024 were in the consumer discretionary and healthcare sectors. The report states that the Chapter 11 filing by H-Food Holdings LLC in November 2024 was among the largest private equity portfolio company bankruptcies during the year.
At the same time, the number of terminated private equity-backed deals in the US fell to 12 in 2024 from 28 canceled deals in the same period a year ago. PE-backed deals accounted for 15.4% of all terminated deals in the US, which stood at 78 .
The value of terminated private equity deals in 2024 was reported at $14.11 billion, down from $17.70 billion in 2023. The value of all terminated M&A deals was $43.34 billion, down from $99.11 billion in 2023.
