Introduction
What a difference a year makes. Just twelve months ago, M&A activity had set all-time records, valuation multiples faced seemingly unlimited expansion and deal makers had access to almost endless levels of inexpensive credit. Since that time, the S&P 500 has declined by more than 19% (the worst decline since 2008), inflation has surged to its highest point in over 40 years, and the Federal Reserve has instituted a series of aggressive and unprecedented rate hikes (which may not be over). In many cases, private equity borrowing rates are currently twice as expensive as they were just a year ago. The Russian invasion of Ukraine contributed to geopolitical uncertainty and created a ripple effect across global energy and commodity markets. Throughout most of 2022, economists forecasted a pending U.S. recession.
