For the first time since tracking began in 2018, the BluWave PE Industry Insights Report shows human capital activity by private equity firms declined year-over-year – down 9.5% in Q2 2023 – signaling a new stage in PE’s adaptation to today’s economic environment and reduced deal flow.
“Though valuations and economic uncertainty have made new acquisitions a challenge, PE firms have adapted by focusing on finding opportunities to increase portfolio company value. Last year, we saw record investment in recruiting by PE firms to bring top talent to companies. The data now shows, however, that investment in human capital is retreating from the levels we’ve witnessed over the past few years,” BluWave founder and CEO Sean Mooney said. “With belts tightening, we are stilling seeing strong hiring activity, but more targeted investments in such talent, and a growing focus on AI and tech.”
The report, which leverages BluWave’s proprietary project data to summarize key trends acted on by the PE industry from Q1 2019 to Q2 2023, reveals a 48% drop in demand for senior advisors in due diligence, largely attributed to massive reductions in deal flow.
In parallel to this human resources decline, BluWave observed increased strategy, revenue growth and technology-related initiatives in the BluWave Activity Index during Q2.
BluWave continues to see increasing activity related to Value Creation, accounting for 77% of the Q2 2023 BluWave Activity Index versus 68% during the same period last year. Among the hottest trends in PE is surging demand for Business Intelligence, Analytics and Artificial Intelligence resources, which grew from being unranked to BluWave’s No. 4 Value Creation category, cracking the top 10 for the first time since Q2 2020.
These revelations come from BluWave, the Business Builders’ Network for private equity grade needs. The Nashville-based company released Thursday its Q2 2023 Private Equity Insights Report that reflects trends from the thousands of projects BluWave equips for more than 500 leading private equity firms and their portfolio companies.
BluWave Managing Director and Head of Client Coverage, Rena Frackt, adds: “The private equity industry is taking action, providing capital and supporting virtually every functional area in their portfolio companies to not only create a foundation for safety, but also empower opportunities for current and future growth.”
To request a copy of the full report, please visit: https://www.bluwave.net/insights-report/
About BluWave
BluWave is the Business Builders’ Network for private equity grade service provider needs. The company’s platform combines concierge-like consultative support with technology, data and AI to expertly connect businesses with proven providers across due diligence, value creation and prep for sale. The BluWave Vetted™ network is an invite-only ecosystem of top tier individuals and service providing groups. Based in Nashville, Tennessee, BluWave ranks as one of America’s fastest growing companies and today serves more than 500 leading private equity firms and thousands of proactive businesses. Visit BluWave.net to learn more.
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