Fintech
Resilient global private equity set for resurgence to long-term growth despite abrupt 2022 reversals in face of rising inflation and rates — Bain & Company Global PE Report
Global private equity remains set for further strong, long-term growth even in the face of a sudden reversal in 2022, driven by economic turbulence and uncertainty amid rising inflation and interest rates, Bain & Company’s 14th annual Global Private Equity Report, released today, concludes.
The report emphasizes that last year was still the second strongest in private equity’s history, despite an abrupt mid-year derailment of dealmaking, exits and fund-raising, triggered by a series of interest rate hikes by the US Federal Reserve in response to sharply higher inflation.
While the setback from June, after unprecedented macro shocks, conspired to slow dramatically what had been a decade-long, consistent and attractive run for the PE industry, the Bain study finds that the sector’s underlying fundamentals remain strong and resilient. The report also points to the potential for the PE sector to become even more appealing to investors chafing at the limitations of public markets, despite the shifting economic tides.
Bain concludes that unlike the period from 2007-08, when the global banking system came close to collapse, nothing is fundamentally broken in the underpinnings for PE’s future expansion and current conditions are nothing the industry hasn’t dealt with successfully before.
“So far this year there has been a continuing slow-down in the action, but private equity’s long-term appeal to investors is secure,” said Hugh MacArthur, chairman of the global Private Equity practice at Bain & Company. “As deal activity begins to pick-up in 2023, the industry continues to be well positioned for long-term growth. Despite the drop-off in deal, exit, and fund-raising activity, 2022 was still the second-best year in history. There is undeniable uncertainty in the global market – but this is something private equity has dealt with and persevered through before.”
Examining present and future challenges for the industry, Bain’s analysis highlights that clear strategic “sight lines,” rather than economic conditions, are what will bring energy back to dealmaking even if interest rates remain higher for longer.
Noting that the industry ended last year with a record $3.7 trillion in dry powder, Bain’s report emphasizes the lessons from the last downturn, during which investors didn’t panic but focused instead on risk management and mitigation to set themselves up to accelerate out of the weaker period. Leading players will keep finding deals that they can underwrite accounting for macro conditions and will stay aggressive, the analysis finds.
“While there is obvious disruption in markets, dealmakers can adjust to do deals that work in a range of conditions. The best will do just that, even with lower levels of activity broadly,” said Rebecca Burack, head of the global Private Equity practice at Bain & Company. “Winners will stay close to their proven sweet spots. Critical to their success will be underwriting dealmaking where their expertise and confidence are highest. We’ve seen from past periods of dislocation that investors who follow this strategy have generated very strong returns – so staying in the game is important for all of the industry’s stakeholders.”
Rapid reversal from record highs in 2022 – but stage set for a resurgence
Bain’s report charts the course of 2022’s far-reaching economic and geopolitical turbulence and its impact on the PE sector, which it finds bore the brunt of macro headwinds.
After marking new record highs in 2021, with completed deals worth $1 trillion, capping a stunning 12-year long upcycle for the industry, 2022’s sudden mid-year break in PE activity saw global buyout value (excluding add-ons) drop steeply, by 35%, to $654 billion last year. Overall deal count, meanwhile, tumbled by 10% with some 2,318 transactions completed.
While 2022’s deal value was still the second-best performance for the market historically, this was chiefly driven by the extraordinary momentum from the year’s first half. The second half’s sharp drop-off in deal activity and value was felt across all regions and most sectors, with the decline exacerbated in Asia-Pacific by repeated market shutdowns due to Covid restrictions.
Banks’ reluctance to lend to large leveraged transactions from mid-year as interest rates rose and economic anxiety intensified dictated how dealmaking ultimately unfolded in 2022, Bain notes. Across the US and Europe, leveraged loans fell 50% to $203 billion.
The result was a decline in the sort of large, high-leverage transactions that have for years buoyed deal value so that average deal size fell by 23% over 2022 to $964 million after having climbed steadily every year since 2014 to achieve a record high in 2021 of $1.2 billion. This was mirrored by increased appeal of smaller deals, which took an increased share of total transactions, and of “add-ons”, which made up fully 72% of all North American buyouts last year by deal count as investors and funds pursued “buy-and-build” strategies.
Bain’s analysis also finds that the 2022 PE reversal also hit growth equity and late-stage venture investment – segments that were previously on fire. Overall deal value in these segments dropped 28% to a rounded $644 billion. Activity undercut by the impact of higher interest rates on deal discount rates for future earnings, in combination with investors recalibrating risk appetite and conservative moves by general partners (GPs) to preserve precious cash reserves.
Deal exits fell even harder than investment activity, Bain’s analysis shows. With every channel for exits in decline, buyout-backed exits dropped by 42% to $565 billion while growth equity exits plummeted by 64% to $312 billion. The falls reflected the complete shut-down of the IPO market amid sharp falls in public equities, as well as a drop in sponsor-to-sponsor deals by 58%. Sales to strategic buyers were higher than the five-year average, largely due to corporate earnings’ resilience, but still ended 2022 some 21% down on the prior year.
While Bain finds that the outlook for PE fund-raising remains exceedingly bullish, new fundraising last year was also affected by the deteriorating conditions and confidence, dropping 10% from 2021’s levels to $1.3 trillion – still the second-highest figure on record.
Despite all of the past year’s declines in dealmaking, exits and fund-raising, Bain’s analysis suggests the long-term outlook for private equity remains one of resilience and expected resurgence even though a turnaround in macro conditions is impossible to predict with accuracy. The study explores some of the key sector trends and themes set to be important for further growth across the PE industry.
Individual investors, accounting for half of global asset wealth, to be PE’s next great growth engine
Individual investors and their wealth are expected to be the new great growth engine for PE, Bain reports. It finds that with individual retail investors holding roughly 50% of all global assets under management (estimated to total $275 trillion to $295 trillion) but with only 16% of the capital held by alternative investment funds, this segment represents a vast, untapped market for PE managers seeking to sustain double-digit growth as the industry matures.
Bain finds that funds that are already exploring retail investment markets are moving quickly and that this is forcing the rest of the industry to make choices on whether to “get in the game” and on their positioning. At the same time high-net-worth individuals and their advisors are increasingly being drawn to alternative investments as they explore diversification options and better returns than the traditional markets for public equity and debt will offer.
Large alternative managers are pushing ahead, Bain notes, with many launching funds allowing high-net-worth individuals access to alternative asset classes, banks and advisors are exploring options for clients and fintech offerings are working to adapt tools and solutions to streamline the process. However, Bain also cautions that this new growth area also comes with steep learning curves for participants looking to make channels work at scale.
PE must pivot to organic growth and expanding margins as higher rates are set to persist
The emerging combination since 2022 of higher interest rates and inflationary pressures pose a twin threat for PE and general partners, Bain’s report emphasizes.
While the analysis notes that predicting the uncertain course of prices or inflation is foolhardy, it notes that a series of powerful factors that are in play do remain certain – including ageing populations, government budget strains, and rising material costs due to the global supply chain crunch and trends to onshoring. Bain’s study concludes that these trends mean that the past, historically unprecedented period of zero-to-negative interest rates is over so investors should assume higher interest rate risk.
In turn, the report finds this creates a new imperative for private equity to create value through margin improvement and organic growth. While PE returns in recent years have largely come from expansion in valuation multiple, it suggests that in future GPs will not have the luxury of relying on higher multiples and returns will need to be sought through growth in earnings (EBITDA) even as market expansion and inflationary cost pressures make those gains harder to achieve.
Bain’s report concludes that for PE firms winning in this challenging environment will require finding ways to adjust to these new macro pressures including through investment in automation, in supply chain redundancy and security, and via managing balance sheets against the risk that interest rates may be “higher for longer.” PE players should also look to target customer groups and industries with lower price sensitivity. Lastly, it finds that PE will need to focus more on organic business growth as emerging technologies, weaker GDP growth and stagnant-to-declining populations limit future market expansion in many industries.
Global energy transition and web3 present further key challenges and opportunities for PE
The global energy transition away from carbon-based fuels in pursuit of net-zero, and the increasing impact of web3, despite present hype and turmoil in the crypto world, are two other important areas of challenge and opportunity for private equity examined in detail in the Bain report.
Bain’s analysis highlights that pressure on PE firms to decarbonize portfolios only intensified in 2022, with regulators, consumers, B2B customers, and investors are stepping up calls for change. At the same time, Bain notes, the race to develop new alternative energy sources and other low-carbon solutions is shaping a generational opportunity to put capital to work. The energy transition will need trillions in new capital, the report emphasizes. While ambiguity around regulation, the pace of change, politics and other issues will persist, Bain suggests that PE and its GPs cannot let such uncertainty deter action. Rather, firms need to develop experience, hone capabilities and nurture the networks that will allow them to turn change to their advantage.
Private equity should also rise to the challenges posed by web3, Bain finds. Despite the present ‘crypto collapse’, the broader technologies behind crypto, collectively known as web3 are here to stay and will continue to drive far-reaching impact for business and across markets, the report says. It concludes that whether someone is an investor in next generation IT infrastructure, a fund manager performing due diligence on traditional companies exposed to web3 disruption, or a PE strategist evaluating new fund types and distribution channels, web3 is very likely to emerge as a critical theme during the next 10 years, so that for many funds now is the time to build depth and evaluate means to exploit the consequent technological shifts.
The fintech landscape continues to redefine itself, driven by innovation, partnerships, and groundbreaking strategies. Today’s roundup focuses on the latest digital wallet offerings, evolving payment trends, strategic collaborations, and notable funding achievements. This editorial explores the broader implications of these developments, casting light on how they shape the future of fintech and beyond.
Beacon’s Digital Wallet for Immigrants: A Gateway to Financial Inclusion
Beacon Financial, a leading player in financial technology, recently launched a digital wallet tailored to meet the unique needs of immigrants moving to Canada. This offering bridges a critical gap, enabling seamless financial integration for newcomers navigating a foreign system.
By combining intuitive technology with user-centric features, Beacon aims to empower immigrants with tools for payments, savings, and remittances. This aligns with the growing demand for tailored financial products that resonate with specific demographics.
Op-Ed Insight:
Financial inclusion is more than just a buzzword; it’s a moral imperative in the fintech space. Products like Beacon’s digital wallet highlight the industry’s potential to create tangible change. As global migration trends increase, such offerings could inspire similar initiatives worldwide.
Source: Fintech Futures.
Juniper Research Highlights 2025’s Payment Trends
Juniper Research’s latest report unveils pivotal payment trends poised to dominate in 2025. Central themes include the adoption of instant payment networks, a surge in embedded finance solutions, and the rise of crypto-backed financial products.
The research underscores the rapid adoption of real-time payment systems, fueled by increasing consumer demand for speed and efficiency. Meanwhile, embedded finance promises to blur the lines between traditional banking and non-financial services, delivering personalized and context-specific solutions.
Op-Ed Insight:
As the lines between financial services and technology continue to blur, these trends emphasize the industry’s shift toward convenience and personalization. The growing role of crypto-based solutions reflects an evolving consumer mindset, where decentralization and digital-first experiences gain precedence.
Source: Juniper Research.
MeaWallet and Integrated Finance Partner to Revolutionize Digital Wallets
MeaWallet, a prominent fintech solutions provider, has partnered with Integrated Finance to advance digital wallet capabilities and secure card data access for fintech companies. This collaboration focuses on empowering fintechs to deliver better, safer digital payment experiences.
MeaWallet’s role as a technology enabler aligns seamlessly with Integrated Finance’s goal of simplifying complex financial infrastructures. Together, they aim to create scalable, robust platforms for secure payment solutions.
Op-Ed Insight:
Partnerships like this underscore the importance of collaboration in driving innovation. As security concerns grow in tandem with digital payment adoption, solutions addressing these challenges are essential for maintaining consumer trust. The fintech ecosystem thrives when synergy and innovation coalesce.
Source: MeaWallet News.
Nucleus Security Among Deloitte’s Fastest-Growing Companies
Nucleus Security has achieved a remarkable milestone, ranking 85th on Deloitte’s 2024 Technology Fast 500 list. This achievement is attributed to its robust cybersecurity solutions, which cater to the increasingly digital fintech environment.
With cyberattacks becoming more sophisticated, fintech companies are under immense pressure to safeguard their platforms. Nucleus Security’s growth reflects the rising demand for comprehensive, scalable security solutions that protect sensitive financial data.
Op-Ed Insight:
In a digital-first world, robust cybersecurity isn’t optional—it’s fundamental. The recognition of companies like Nucleus Security signals the growing importance of protecting fintech infrastructure as the industry scales globally.
Source: PR Newswire.
OpenYield Secures Funding to Transform the Bond Market
OpenYield has announced a successful funding round, aiming to revolutionize the bond market through innovative technology. The platform promises greater transparency, efficiency, and accessibility in fixed-income investments.
This funding underscores the growing appetite for digitizing traditionally opaque financial markets. By leveraging cutting-edge technology, OpenYield seeks to democratize bond investments, making them accessible to a broader audience.
Op-Ed Insight:
The bond market, long viewed as complex and inaccessible, is ripe for disruption. OpenYield’s efforts to modernize this space highlight fintech’s transformative potential to democratize finance and empower individual investors.
Source: PR Newswire.
Key Takeaways: Shaping the Future of Fintech
Today’s developments underscore several critical themes in the fintech landscape:
- Personalization and Inclusion: Products like Beacon’s wallet highlight the importance of understanding and addressing specific user needs.
- Collaborative Ecosystems: Partnerships, like that of MeaWallet and Integrated Finance, emphasize the power of collaboration in solving industry challenges.
- Emerging Technologies: Juniper Research’s predictions affirm the continued influence of blockchain, embedded finance, and instant payment networks.
- Security at the Core: The recognition of Nucleus Security underscores the essential role of cybersecurity in fintech.
- Market Transformation: OpenYield’s funding signifies the ongoing disruption of traditional financial markets, paving the way for broader accessibility.
The post Fintech Pulse: Daily Industry Brief – A Dive into Today’s Emerging Trends and Innovations appeared first on News, Events, Advertising Options.
As fintech continues to reshape the global financial landscape, today’s briefing highlights pivotal developments, strategic expansions, and innovative launches across the industry. This op-ed explores the latest advancements with commentary on their potential impacts and challenges.
Finastra Data Breach: A Wake-Up Call for Fintech Security
Source: KrebsOnSecurity
The cybersecurity landscape is buzzing after Finastra, one of the largest financial technology providers globally, confirmed an investigation into a potential data breach. Reports suggest unauthorized access to its systems, raising concerns about data security across its client base, which includes thousands of banks and financial institutions worldwide.
Implications and Challenges
While the details of the breach remain sparse, this incident underscores a glaring vulnerability in the fintech sector—cybersecurity. As financial services increasingly rely on interconnected ecosystems, breaches like these threaten not only individual institutions but also the trust customers place in fintech platforms.
The key takeaway for the fintech industry is clear: proactive cybersecurity strategies must go beyond compliance. Real-time threat detection, robust encryption standards, and regular audits are no longer optional but essential for maintaining operational integrity.
Future Considerations
This breach could trigger a domino effect, prompting regulators to tighten security standards and requiring fintech companies to double down on investments in data protection. Startups and mid-tier players, often lacking extensive cybersecurity budgets, may face significant pressure to keep pace.
PayPal Resurrects Money Pooling Feature
Source: TechCrunch
In a bid to stay ahead of the competition, PayPal is reintroducing its Money Pooling feature, a popular tool that was discontinued in 2021. The feature allows users to pool funds collectively, catering to families, small businesses, and social groups.
Strategic Revival
This move reflects PayPal’s commitment to customer-centric innovation. By reinstating a feature beloved by its user base, the company seeks to reclaim market share lost to emerging competitors offering similar functionalities.
Broader Industry Impacts
Money pooling represents a broader trend in fintech—customized solutions that cater to niche needs. This reintroduction may inspire competitors like Venmo and CashApp to refine their collaborative payment offerings.
While this move strengthens PayPal’s ecosystem, its success will depend on seamless integration with existing services and robust fraud prevention mechanisms to avoid abuse of the feature.
Santander Expands Fintech Reach in Mexico
Source: Yahoo Finance
Santander is making waves in the Latin American fintech space with the launch of a dedicated fintech unit in Mexico. The initiative aims to capitalize on Mexico’s growing fintech adoption and digital payments market, valued at billions of dollars annually.
Strategic Significance
Santander’s expansion into Mexico highlights the region’s untapped potential. Latin America is a burgeoning market for fintech, driven by increasing smartphone penetration, a youthful demographic, and demand for accessible financial services.
Challenges on the Horizon
While Mexico offers immense opportunities, regulatory complexities and market competition from local players like Clip and Konfío pose significant challenges. Santander will need to blend its global expertise with local adaptability to succeed in this dynamic market.
2024 Global Fintech Awards: Spotlighting Excellence
Source: PRNewswire
Benzinga has announced the winners of the 2024 Global Fintech Awards, honoring companies and individuals driving innovation in financial technology. This year’s winners spanned categories like blockchain, artificial intelligence, and payment solutions.
Recognizing Industry Leaders
Awards like these highlight the collaborative spirit and entrepreneurial drive fueling fintech growth. Recognizing trailblazers not only motivates incumbents but also inspires startups to push the boundaries of innovation.
What It Means for the Ecosystem
The awards also bring attention to emerging technologies. Categories such as blockchain and AI signal the industry’s continued focus on leveraging cutting-edge tech for efficiency and scalability.
Commonwealth Central Credit Union Partners with Jack Henry
Source: FinTech Futures
Commonwealth Central Credit Union (CCCU) has announced a partnership with Jack Henry, a leading financial technology provider, for a comprehensive tech upgrade. The collaboration focuses on enhancing member experience through improved digital services.
Modernizing Member Experiences
Credit unions have often lagged behind major banks in adopting advanced digital solutions. By partnering with Jack Henry, CCCU aims to bridge this gap, offering members streamlined services such as mobile banking, automated lending, and personalized financial tools.
A Growing Trend
This partnership reflects a broader trend in the financial industry—credit unions and smaller banks embracing fintech to remain competitive. As customer expectations evolve, partnerships like this may become the norm rather than the exception.
Key Takeaways for the Fintech Industry
- Cybersecurity is Critical: The Finastra breach underscores the need for robust security measures.
- Innovation Drives Loyalty: PayPal’s revival of its Money Pooling feature highlights the importance of listening to customers.
- Regional Opportunities: Santander’s expansion into Mexico showcases the untapped potential of emerging markets.
- Recognition Matters: Awards like Benzinga’s provide valuable visibility for companies and individuals shaping the industry.
- Partnerships Foster Growth: Collaborations between credit unions and fintech companies signify a trend towards modernized financial solutions.
The post Fintech Pulse: Industry Updates, Innovations, and Strategic Moves appeared first on News, Events, Advertising Options.
The fintech sector continues its relentless drive toward innovation and market dominance. Today’s highlights include a record-breaking customer milestone for Revolut, groundbreaking fintech solutions for women in the EU, open entries for the PayTech Awards 2025, implications of political shifts on funding, and notable recognition at the US FinTech Awards.
Revolut Hits 50 Million Customers: A Global Fintech Giant’s Milestone
Source: Revolut
Revolut, the UK-based financial super app, has achieved a monumental feat: surpassing 50 million customers worldwide. This milestone underscores its position as a leader in the global fintech landscape, furthering its ambition to create the world’s first truly global bank.
Key to this success has been Revolut’s strategy of expanding its offerings, from banking to travel and crypto services, all within a seamless user experience. The company’s recent ventures into emerging markets such as Latin America and Asia demonstrate its intent to bridge financial services gaps while retaining competitive differentiation through technology.
This milestone is not just a triumph for Revolut but a signal of fintech’s capacity to redefine traditional banking. It reinforces the narrative that digital-first strategies, customer-centric innovation, and international scalability can challenge long-standing financial institutions.
PayTech Awards 2025: Celebrating Excellence in Innovation
Source: FinTech Futures
The PayTech Awards 2025 are officially open for entries, promising to spotlight the brightest minds and most innovative projects in the payment technology sector. These awards are a testament to the industry’s commitment to advancing secure, seamless, and scalable payment systems.
This year, the focus is on emerging technologies that redefine how businesses and consumers interact financially. Categories will recognize achievements across multiple domains, including sustainability in payments, AI-driven solutions, and partnerships that push boundaries.
As fintech companies prepare their entries, the awards provide a timely reminder of the sector’s ongoing evolution and the collaborative efforts required to achieve meaningful breakthroughs.
U.S. Politics and the Fintech Sector: A New Era of Funding?
Source: American Banker
The U.S. fintech sector might witness an infusion of optimism as speculation about a second Trump presidency gains momentum. The Trump-era policies of deregulation and venture capital encouragement are remembered as catalysts for unprecedented fintech growth during his first term.
While it remains uncertain how regulatory landscapes will shift, the possibility of a more relaxed approach toward fintech compliance could rejuvenate funding inflows. Investors and startups alike are watching closely, weighing the potential benefits against long-term risks tied to reduced oversight.
A politically charged backdrop often spells volatility, but for fintech, it may also spell opportunity. Preparing to adapt quickly will be crucial for startups and established players in the face of any regulatory pivot.
Klara AI and Unlimit: Addressing the €1.3 Trillion Female Economy
Source: FF News
Klara AI has teamed up with Unlimit to launch a fintech solution aimed at empowering women across the EU. This collaboration targets the €1.3 trillion female economy by addressing the unique financial needs of women entrepreneurs and consumers.
The solution promises to integrate AI-powered tools with streamlined financial management services, enabling users to access credit, manage investments, and scale businesses effectively. By tailoring services to the underserved female demographic, the partnership hopes to drive financial inclusion and support economic growth.
This initiative stands as a blueprint for fintechs exploring niche markets, proving that innovation tailored to specific segments can yield transformative results.
Autire: Accounting Tech of the Year at US FinTech Awards
Source: Business Wire
Autire, a rising star in financial technology, has been crowned ‘Accounting Tech of the Year’ at the US FinTech Awards 2024. The award recognizes Autire’s ability to blend cutting-edge AI with intuitive user interfaces, delivering unparalleled accounting solutions for businesses of all sizes.
Autire’s platform has gained traction for automating complex accounting tasks, ensuring compliance, and delivering actionable insights through real-time analytics. Its emphasis on reducing administrative burdens for SMEs has been particularly impactful, enabling entrepreneurs to focus on growth rather than bookkeeping.
The recognition not only cements Autire’s reputation but also highlights the role of AI-driven accounting solutions in reshaping business operations globally.
Final Thoughts: A Fintech Revolution in Full Swing
From customer milestones to policy-driven opportunities, the fintech ecosystem is in constant evolution. Revolut’s ascent to 50 million users signals growing consumer trust in digital platforms. The PayTech Awards continue to inspire innovation, while political shifts could redefine the regulatory landscape. Initiatives like Klara AI and Unlimit emphasize the power of targeted solutions, and companies like Autire show how niche technologies can achieve broad impact.
The next phase of fintech growth will likely hinge on inclusivity, adaptability, and innovation—pillars that today’s news stories exemplify.
The post Fintech Pulse: Milestones, Partnerships, and Transformations in Fintech appeared first on .
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