The M&A world is changing rapidly. While I am bullish on search funds, things that worked a decade ago no longer work. I am curious how the community is factoring these shifts into their investment theses and/or search tactics. Would love to get your thoughts below.

4 things everyone in M&A (searcher, investor, intermediary) should be pondering right now:

1. Why are more and more PE firms looking to pivot away from traditional buyouts and into private credit?
https://www.ft.com/content/84409cde-1197-49c9-bf88-dbe371e44313

2. With leverage ratios contracting, loan-to-value in the leverage loan market plunging, and Debt to EBITDA ratios contracting, how are you factoring this into your deal structures?
https://files.pitchbook.com/website/files/pdf/Q3_2023_US_PE_Breakdown.pdf

3. With a significant number of economists predicting a hard landing and recession next year, what would be the impact on search funds in regard to fundraising, acquisitions, and value creation? Any stories of what happened last time?
https://www.bloomberg.com/news/articles/###-###-#### /recession-worries-have-investors-buying-treasuries-doubting-stocks

4. Since interest rates are likely to stay elevated for a longer period of time, are any searchers having conversations with investors post-LOI about buying assets with higher equity financing and refinancing with debt later on?