While the markets continue to function (albeit at higher pricing and moderately worse terms), summer vacations were in full effect as the end of the summer saw a slowdown across the board.
Rising rates and a summer slowdown made July the lowest direct lending volume month since March with $9.5 billion of total deal volume
Only 28% was for true new issue (LBO or M&A), the lowest percentage since February
August was presumably similarly slow, although data has yet to be released
While it's yet another datapoint pointing towards a slower economy, very few lenders I speak with remain overly worried
Twin Brook, for example, has already announced 5 deals in September after completing 8 transactions in August
It is important to note that most of the slowdown has occurred at the higher end of the market as some mega-funds have cut back their ticket sizes
There were no jumbo deals ($1 billion+) closed in July, although there were 2 in August (Avalara and the analytic solutions segment of PerkinElmer)
Owl Rock, Apollo, HPS and others remain active on this front, although at a slower pace than over the past few years
Lenders that play down market seem to be offering firmer packages given smaller fluctuations in inflows from the pension funds and other institutional investors that comprise their LP base
The HCM Technology M&A market is experiencing resilient transaction volumes in 2024 following a drop off in 2023 due to improvements in macro-economic conditions including unemployment and inflation rates that affected public markets across the globe.
