Private equity activity skyrocketed in 2021 and more is yet to come

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2021 was the strongest year for global M&A since data collection began in 1980 and private equity deals have more than doubled, according to Refinitiv.

Private equity players are sitting on record amounts of capital – even during the initial COVID-19 lockdown, their fundraising was still fairly healthy. Additionally, pension funds, insurance companies and other funds have a hefty stockpile of dry powder on hand, which they need to deploy. When businesses have lots of capital available, financing conditions are friendly, interest rates and prices in some areas of the market are low, these factors sum up to a perfect real estate investment opportunity.

In 2021, market players took notice and went on a buying spree. The sectors most favored last year were logistics, technology - especially data centers, residential and healthcare – all of which seem to offer good post-pandemic opportunities.

“Deal making fell off a cliff in the second quarter of 2020, as buyers, including private equity firms, pressed the pause button, uncertain of what the COVID-19 pandemic might bring. But private equity investment in the real estate sector skyrocketed last year with multiple mega deals already completed and more yet to come,” Evan Z. Lazar, Co-Chair, Global Real Estate at Dentons told PropertyEU, following the recent release of its Ranking of Law Firms, which has placed the Firm at one of top 5 law firms. The ranking features law firms that advised on the top 25 largest real estate transactions of 2021, over 20 of which exceeded €1 billion threshold.

So what’s to come in 2022? There is still a high level of capital available and the positive real estate market conditions remain, so we can expect a healthy transaction volume to continue into this year.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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