The private equity industry is facing a severe liquidity crunch, with firms globally sitting on a whopping 28k unsold companies valued at USD 3.2 tn, according to consultancy Bain & Co's latest annual private equity report (pdf). Nearly half of assets have been held for four years or more, which the report says is the largest proportion since 2012

The good and the bad: The staggering pile of assets highlights the breakneck growth of the buyout industry over the past decade, but also points to the immense challenges posed by soaring interest rates in recent years that have made exiting investments far more difficult.

Dealmaking came to a crashing halt last year as debt financing dried up: The total value of companies PE groups sold via private sales or public listings dipped 44% y-o-y in 2023 to USD 345 bn — the lowest level in a decade. The slump was even worse for portfolio companies sold to rival buyout firms, with sales tumbling 47% to USD 62 bn amid widespread pricing disagreements across the industry.

ALSO WORTH NOTING-

  • BTC once again reached a new record high, breaking the USD 72k barrier and hitting USD 72,886 before paring back gains yesterday. BTC was trading at USD 72,636 as of midnight CLT.
  • Companies have raised USD 3.2 bn through European IPOs since January — over double the amount raised during the same period last year. (Financial Times)

THE MARKETS THIS MORNING-

Asian markets are mixed this morning, with the Nikkei down 1.33% at dispatch time (setting it on course for a second day of losses). The Shanghai Composite is (just) in the red, while the Kospi and Hang Seng are in the green. Traders of Japanese equities were reacting to news that inflation in January was higher than pundits had expected, CNBC writes.

Looking ahead: Shares in Europe, on Wall Street and in Toronto look set to start the day in the green as stock futures inched up overnight. Wall Street is looking forward to the February consumer price index reading — it’s due out at 8:30am Eastern time in the US.

EGX30

33,383

+1.4% (YTD: +34.1%)

USD (CBE)

Buy 48.97

Sell 49.11

USD at CIB

Buy 48.95

Sell 49.05

Interest rates CBE

27.25% deposit

28.25% lending

Tadawul

12,556

-0.5% (YTD: +4.9%)

ADX

9,232

0.0% (YTD: -3.6%)

DFM

4,248

-0.1% (YTD: +4.6%)

S&P 500

5,118

-0.1% (YTD: +7.3%)

FTSE 100

7,669

+0.1% (YTD: -0.8%)

Euro Stoxx 50

4,930

-0.6% (YTD: +9.1%)

Brent crude

USD 82.21

+0.2%

Natural gas (Nymex)

USD 1.75

-0.7%

Gold

USD 2,182

0.0%

BTC

USD 72,636

+5.3% (YTD: +71.2%)

THE CLOSING BELL-

The EGX30 rose 1.4% at yesterday’s close on turnover of EGP 7.2 bn (53.8% above the 90-day average). Foreign investors were net buyers. The index is up 34.1% YTD.

In the green: E-finance (+14.0%), CIB (+8.9%), and Telecom Egypt (+4.6%).

In the red: Elsewedy Electric (-6.4%), Orascom Construction (-5.0%), and Heliopolis Housing (-5.0%).

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