Private Equity Rebound: Warburg Pincus Predicts Deal Surge

Warburg Pincus CEO Jeffrey Perlman anticipates a significant increase in private equity deals in 2025-2026 due to lowered interest rates, excess capital, and AI sector growth. Sellers are expected to lower prices, making deals more feasible. Optimism grows as financing costs ease and large transactions, like Blackstone's acquisition, proceed.

Warburg Pincus CEO Jeffrey Perlman forecasts a notable surge in private equity transactions in 2025 and 2026, driven by easing interest rates, unallocated capital, and advancements in the AI sector. Perlman discussed these points during the Reuters NEXT conference in New York.

Perlman noted that after years of subdued activity, company sellers are likely to reduce prices, leading to more deal closures. Furthermore, buyers may be willing to offer higher amounts, aligning with positive growth prospects. Perlman highlighted the challenging deal landscape of 2021, suggesting a rise in market confidence as growth stabilizes.

Industry optimism for a resurgence in leveraged buyout activities is building. This is primarily supported by improved financing conditions. Despite recent challenges, notable deals, such as Blackstone's $8 billion acquisition of Jersey Mike's Subs, demonstrate resilient transaction potential.

(With inputs from agencies.)