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PE investment in consumer at multiyear low

Line chart comparing U.S. and global total deal value of private equity investment in the consumer industry from Q1 2019 to Q1 2024. Deal value peaked in Q1 2021 at nearly $33.8 billion globally and $16.3 in the U.S. before declining, ending at $3.3 billion globally and $1.1 billion in the U.S. in Q1 2024.
Data: London Stock Exchange Group; Chart: Axios Visuals

Private equity investment in consumer is at a multiyear low both globally and in the U.S., according to data provided by the London Stock Exchange Group.

Why it matters: PE's absence has led to less competitive processes and is undermining overall deal activity in the sector.

  • Both Carlyle and KKR have ceased making investments in consumer retail.

Yes, but: What's happening in consumer is in stark contrast with U.S. PE activity overall, which is up 54% year over year.

By the numbers: PE invested $91 million in consumer cyclicals and just over $1 billion in consumer non-cyclicals in the U.S. in Q1, nearly $1.1 billion overall.

  • That's below even last year, when PE invested $315 million in consumer cyclicals and nearly $1.4 billion in consumer non-cyclicals, to total nearly $1.7 billion.
  • As the chart illustrates, a similar picture is emerging globally.

Zoom in: The industry faced constant upheaval since the pandemic, including volatile consumer demand, inflation and supply chain disruption.

  • Those issues worked themselves out by the middle of last year, with a return to normalcy around Labor Day and the back-to-school season, industry sources say.
  • Industry dealmakers told Axios in February they were tempering their expectations after entering 2024 bullish, as valuation uncertainty continues.

What we're watching: Dealmakers predict (or hope) companies will hit the block early next year, marketed off of audited 2025 results and aided by more insight into the consumer, valuations and government policy.

  • Currently several auctions in consumer are on hold or having difficulty lining up bidders, industry sources say.
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