What’s the current state of the US private equity market? “Sustained higher interest rates, inflation…damped deal and exit activity” in 2023. Exits have been extended for years. “The growing need for liquidity options will likely drive an explosion in continuation funds that provide cash-out opportunities and secondary sales by fund investors.” The investment community’s hope is that individual investors will step in to help.
Remarkably, the economy has continued to grow at a healthy pace even as inflation has come down. The Fed’s 5.25 percentage point increase in the federal funds rate over the last two years has had surprisingly little effect on either consumer spending or the job market. US real GDP grew 2.5% in 2023, a much stronger level than previously expected.
A report coming from the Joint Committee on Taxation for a hearing before the Senate Committee on Finance probably should be a warning that certain tax planning techniques may be in for some increased regulation.