Q3 2022: Growing Market Uncertainty
- 2022’s third quarter in many ways was the continuation of second quarter trends, with the Federal Reserve continuing to aggressively hike rates in an effort to tame inflation, war between Russia and Ukraine persisting, and concerns of potential economic recession.
- Despite these challenging headwinds, private market M&A activity and valuations remain strong, down from 2021’s record highs, but comparing favorably to 2020 and prior years. While changing conditions in credit markets have made leveraged acquisitions difficult in some cases, acquirers continue to pursue premium assets aggressively.
- 2022 year-to-date M&A transaction volume has remained strong, down 26.2% from 2021, but up 8.3% from 2020, and down just 0.5% from 2019. To date Q2 has been the most active quarter during 2022. with Q1 and Q3 nearly identical in terms of announced deals, 131 and 132 respectively.
- Through the first three quarters of the year, PMCF’s four tracked medical subsector indices have all outperformed the benchmark S&P 500 Growth Index, which was down 31.4%, and two of the indices outperformed the Dow Jones Industrial Average, which was down 21.5%.