Valuations expected to drop

According to a new report, which surveyed private equity firms, the majority of respondents expect valuations to drop during the next six months.

DealCloud’s Spring 2022 DealCloud Dealmaker Pulse Survey report found 77% of respondents expect valuation and pricing multiples to drop during the next six months compared to the last 12 months. Broken down, 57% of large PE houses felt this way, alongside 42% of mid-market GPs and 32% of boutique firms.

Respondents said they believe this is due to increased competition and current market multiples.

When considering pricing and valuation obstacles, DealCloud found more than half (52%) of those surveyed said they are most concerned about increased or overlooked risks impacting valuations and pricing multiples moving forward.