Fed chair Jay Powell on Friday warned of coming economic pain, causing dealmakers to wince.
The big picture: Conventional wisdom is that sellers retreat in rising rate environments, as valuations contract. Particularly after such a long bull market in which growth trumped fundamentals.
Plot holes: Private equity investors who spoke with Axios tend to agree with the conventional wisdom. Several, however, provided a lengthy list of caveats.
The most significant change is that private capital markets have moved from the cottage to the compound, with dry powder now measured in trillions.
This goes beyond supply and demand. The nature of deals have changed, with the industry diversifying beyond vanilla LBOs in sectors like industrials and toward higher growth areas like tech and healthcare.
The bottom line: Deal activity is slowing, but still will move faster than history books would suggest.
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