Key takeaways from our Mid-Market networking event: renewed optimism & the rise of AI
We recently hosted junior and mid-level private equity investors from the Mid-Market sector at the Bloomsbury Club in London for an evening of drinks and thought-provoking discussions reflecting on the first half of 2024.
We've shared our key takeaways from the event.
Renewed optimism in Mid-Market
Despite the slow pace of the anticipated 'bounce back', the first half of 2024 has sparked renewed optimism in the mid-market space. Several key trends emerged during our discussions:
- Increased deal flow aiding investor sentiment
- Oversubscribed fundraises and pipeline building
- Advisors re-engaging and firms preparing for exits
Hiring also picked up, especially at the associate level, which had declined in 2023. With LPs eager to see returns, and GPs eager to return capital and earn some goodwill for future fundraises, DPI and exit preparation were recurring themes throughout the evening.
The rise of AI in private equity deals
Another major focus was the growing role of technology in deal-making. Traditionally, relationship-building has been central to mid-market transactions, and technology has often faced resistance due to concerns about dehumanising the process. However, the rise of AI is changing the landscape. Several private market software and AI firms are now streamlining the initial stages of deals, allowing investors to assess opportunities more efficiently before diving into detailed memos. While the long-term value of these technologies remains to be seen, their potential to disrupt the traditional deal-making process is undeniable.
This shift raises important questions about the future role of junior investors. Could AI save precious time by evaluating businesses and creating prioritised target lists for senior staff? Or will human judgement and relationships remain essential in this people-driven industry? These are key considerations as technology continues to reshape private equity.
This shift raises important questions about the future role of junior investors. Could AI save precious time by evaluating businesses and creating prioritised target lists for senior staff? Or will human judgement and relationships remain essential in this people-driven industry? These are key considerations as technology continues to reshape private equity.
Looking ahead: a cautious but optimistic view
While early signs of recovery are promising—aided by political and economic stability—it’s crucial to remain cautious. As we move through the second half of 2024, mid-market firms will continue to face a competitive environment. The return of junior hiring and the integration of technology are signs of positive momentum, but the long-term implications remain to be seen. Ultimately, firms that adapt quickly to these evolving market dynamics will be best positioned for success.
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