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Lincoln’s Private Market Index Sees Modest Growth
- Lincoln International reported 2.3% growth in the Lincoln Private Market Index (LPMI) in Q4 2024, driven by EBITDA expansion and stable valuation multiples.
- The LPMI outperformed the S&P 500 and its sub-index excluding the “Magnificent Seven” in Q4, but its 2024 growth (8.0%) lagged behind the S&P 500.
- Private companies faced challenges with EBITDA and revenue growth falling below targets in 2024.
- Rising debt levels and lower buyout multiples may impact private equity returns, according to Steve Kaplan.
- Higher competition in direct lending led to financing dynamics shifts in the market.
- Private equity dealmaking saw declining buyout multiples and uncertain optimism for deal acceleration in 2025.
- Financial stress signs emerged with an increase in covenant defaults and growing concern over paid-in-kind (PIK) interest.
- M&A activity in 2025 may face hurdles due to valuation gaps, interest rate shifts, and policy concerns, potentially delaying recovery.
- Private companies may face restructuring and prolonged hold periods as a result of these challenges.
- Lincoln International offers M&A advisory services and has a global presence in 15 countries.
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