1H 2022: Growing Market Uncertainty
- The second quarter was defined by general sense of uncertainty in the market, as concerns about inflation and rising interest rates dominated headlines
- On top of the economic factors impacting the market, major geopolitical issues continue to add uncertainty. The conflict between Russia and Ukraine continues to shape geopolitical discourse, while periodic outbreaks of COVID apply strain on the healthcare system. Public equity markets reflected this negative sentiment with an underwhelming second quarter, but middle market M&A transactions have not been impacted to the same extent.
- Despite market concerns, 2022 Q2 M&A transaction volume remained strong, with a robust 28% increase from Q1. The total deal volume of 299 transactions for the first half of the year is higher than the 2017-2020 average. Activity levels can be attributed to record amounts of private equity dry powder and appetite for high quality assets that can perform in a volatile market.
- During the first half of the year, PMCF’s four tracked medical subsector indices all outperformed the benchmark S&P 500 Growth Index, which was down 28.5%, and two of the indices outperformed the Dow Jones Industrial Average, which was down 15.9%.