Good morning, ! It's Wednesday, and we're covering why private equity doubles down on food & beverage, the M&A dominance of the exit landscape, private credit surging in Europe, and LP allocations to PE hitting a new high.

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Mergers, Markets & Meals: Private Equity’s Strategic Play in the F&B Sector

As consumer behavior evolves, global supply chains recalibrate, and capital markets shift gears, one sector has remained consistently attractive to private equity investors: food & beverage. Behind every acquisition, roll-up, or strategic exit lies a deeper narrative, one driven by changing diets, the rise of plant-based innovation, and the pursuit of resilient, recession-proof revenue.

This report offers a data-rich, deal-focused exploration into how and why private equity is doubling down on food and beverage. From the post-pandemic surge in health-conscious investments to the comeback of frozen foods and baked goods, we uncover what’s driving deal volume, where exits are happening, and how capital is moving across regions and subcategories. 

Whether you're a fund manager, corporate strategist, or growth-stage operator, this report reveals why F&B is more than just a consumer staple, it’s a high-performance investment thesis for 2024 and beyond.

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Exit Strategies: Corporate Buyers Take the Lead

Private equity exits are evolving, and corporate buyers are back in the driver’s seat. In 2024, 50% of all exits were sales to corporates. Meanwhile, sponsor-to-sponsor deals scaled to just 45%, reflecting a tougher secondary market where PE firms are holding onto assets longer, or struggling to find willing buyers.

Why it matters: With IPOs still a rounding error (just 1% in 2024), the M&A route remains PE’s best shot at liquidity. But as corporate buyers flex their cash reserves, the real question is: How long can this run last before strategic acquirers start tightening their wallets?

Bottom line: If you're looking for an exit, it’s M&A or bust, for now.

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Liquidity Corner: LPs Are Doubling Down on PE

Limited partners aren’t pulling back—they’re allocating more to private equity than ever. LP target allocations hit 8.3% in 2024, up from 6.4% in 2015, showing a steady appetite for illiquid assets despite a challenging exit market.

Why it matters: More capital locked in PE means fewer forced sales, but also longer hold periods for GPs looking for liquidity. With IPOs still sluggish and corporate buyers driving most exits, secondary markets may need to pick up the slack—if buyers can stomach the discounts.

The big question: Can GPs convert growing LP commitments into real liquidity, or will distributions keep lagging allocations?

Delivering Alpha: Audax Drives Off with Lanter

Audax Private Equity has acquired a majority stake in Lanter Delivery Systems, betting that unattended, overnight deliveries aren’t just for Amazon. Lanter operates 120+ hubs across 48 states, delivering OEM parts to 13,000+ locations nightly. 

The deal comes via Audax’s Business Services strategy, with plans to expand through its Buy & Build playbook. While official terms weren’t disclosed, sources peg the transaction at ~$1 billion, implying a ~10x EBITDA multiple. Seller Equity Group Investments exits after a six-year ride. This one’s classic PE: infrastructure-heavy, recession-resistant, and delivering after dark.

Private Credit: The New Sheriff in European Lending

Private credit is thriving in Europe, and the numbers prove it. Assets under management have skyrocketed fivefold over the last decade to $505B, growing at an impressive 18.4% CAGR. Traditional banks are still under regulatory pressure, creating a wide-open lane for private credit to step in.

PE firms are taking note—with over $289B in dry powder, they're increasingly looking to private credit for financing. And the momentum isn't slowing: a €290B pipeline of syndicated loans maturing by 2030 offers ample refinancing opportunities. Faster execution, more flexibility, and a growing borrower appetite make this one of the most attractive plays in European finance today.

Frontier Market Rally Faces Trump Shockwaves

High-yield frontier markets have enjoyed a two-year rally, but the tide is turning. Trump-related risks are driving a global risk-off shift, exposing overvalued debt and fiscal instability.

1. Overvalued & Risky – Argentina and Senegal face debt crises, with unsustainable fiscal paths and likely restructuring.

2. Political Uncertainty – Ecuador’s elections and Ukraine’s fragile ceasefire hopes create market volatility.

3. Selective Bright Spots – Gabon, Pakistan, and Angola stand out, backed by IMF support and political shifts.

With global capital shifting toward safer assets, frontier debt markets are at a crossroads—some will thrive, others will unravel.

This Week in History: When Markets Took a Bullet with Reagan

March 30, 1981—Wall Street faced a moment of pure chaos. As news broke of an assassination attempt on President Ronald Reagan, the Dow Jones Industrial Average plunged nearly 2.4% before rebounding once it became clear Reagan would survive.

Why it mattered: The attempt came just as Reagan’s pro-business, supply-side economic policies—dubbed Reaganomics—were taking shape. Investors had been betting on lower taxes, deregulation, and a bullish stock market, but any uncertainty about Reagan’s ability to govern sent markets into a panic.

Once Reagan emerged from surgery cracking jokes, confidence rebounded. His near-death moment turned into a political advantage, allowing him to push through major tax cuts and economic reforms that ultimately fueled a multi-year bull run.

The takeaway? Markets hate uncertainty, but strong leadership can turn fear into opportunity.

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