NEWS

New Survey by Citizens Financial Group Shows Positive Outlook for Private Equity in 2024

Though public sentiment toward private equity remains largely negative, there is some relief this week in a new survey published by Citizens Financial Group that found 75 percent of small and mid-size business owners view private equity as a source of current or future partnership and funding.

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Continued receptivity from founder-owned businesses comes as a sharp contrast to coverage of private equity in traditional media and the industry’s current political perception—welcome news for sponsors looking to get deals across the finish line, particularly in the lower middle market.

Conducted as part of its 2024 M&A outlook, the Citizens’ survey questioned 530 leaders of small and mid-size businesses on their economic outlook for the coming year. Despite mixed headlines this year, more than 60 percent of businesses plan to expand headcount in 2024, while only 9 percent believe the 2024 election cycle will have a negative impact on their company’s growth plans. Fewer than 40 percent feel that geopolitical issues pose a serious threat to their company’s financial performance.

Supply chain fears haven’t entirely eased, however, with 38 percent of respondents reporting that they have become more concerned about disruptions in 2024 than the prior year; 51 percent felt the same level of concern.

Citizens’ separate private equity survey found a majority of participants expect a jump in deal volume this year.

“With $2.5 trillion of private equity dry powder on the sidelines, elevated buyer enthusiasm and a positive perception of sponsors should support a constructive environment for dealmaking,” said Don McCree, vice chair and head of commercial banking at Citizens.

Similar research from analysts at Bain & Company predicts that general partners will soon get off the sidelines and start buying. Funds have cash that needs to get put to work, 26 percent of which "is four years old or older, up from 22 percent in 2022,” according to the report.

Bob Clair

Bob Clair is a reporter at Transacted covering private equity and investment banking. He has covered breaking M&A news for several years and is a general assignment freelance reporter for The New York Times, where he shared in a 2021 Pulitzer Prize win.