10 │ Market sentiment
LP-led transactions expected to be more expensive, but GP-led pricing will be unchanged.
View on next year's pricing environment
- Nearly 40% of the survey respondents expect LP-led deals to become more expensive, likely due to a combination of increasing competitive tension and improving macroeconomic outlook. Pricing for GP-led transactions is largely expected to remain unchanged going into 2024 as the imbalance between available supply and shortage of demand persists.
View on next year’s pricing environment by transaction type¹
- Split by number of respondents.
Secondary buyers predict a big year for transaction volume in 2024.
Forecasted 2024 transaction volume
- Forecasted 2024 transaction volume slightly increased (2 percentage points) on 2023’s bullish sentiment with 93% of the respondents expecting volume will be at least $100 billion in 2024 and 54% expecting it to reach over $125 billion.
- Record levels of dry powder, $174 billion at the start of the year, should provide a strong foundation to support this bullish outlook.
- With no signs of liquidity returning to normalized levels in the near term, we expect LPs to increasingly look to secondaries as an alternative source of liquidity, allowing them to manage allocations and enabling them to continue capital deployment into new primary funds.
- We see significant demand for GP-leds from GPs in an exit constrained market and with LP portfolios increasingly competitive, we expect increasing buy-side demand for these deals to drive incremental returns.
- This market outlook represents the largest volume projection ever seen and is driven by the growing appetite of both LPs and GPs for liquidity solutions combined with solid expectations for a continually improving macroeconomic environment, strong public market performance, narrowing bid-ask spreads, and new entrants to fuel the market.
Forecasted 2024 transaction volume¹
- Split by number of respondents
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