Pension fund merger and acquisition deals dropped 78.9 percent year-over-year
Mergers and acquisition (M&A) deals that were directly involved with pension funds saw a 78.9 percent plunge year-over-year, data from S&P Global Market Intelligence found.
According to the report, the total transaction value was at $2.66 billion in the last three months of 2023. This was a decrease from the $12.63 billion at the same time in 2022 as the number of deals also declined from 41 to 25.
Notably, 2023 saw the aggregate value of deals that involved pension funds fall by 35.6 percent, which amounted to only $28.68 billion. Deal volume also saw a drop from 155 to 106.
Most of the pension fund-backed investments in 2023 were in the technology, media, and telecom sector, which amounted to $17.87 billion. This was an increase from the $7.52 billion seen in 2022, which took the sector to the top spot from its third place in the prior year.
The energy and utilities industry followed with $2.77 billion, which was a large drop from its $13.09 billion in the previous year. The materials sector took the third place with $1.83 billion, seeing a massive increase from its $210 million in 2022.
The sector that took the smallest percentage of the total number of pension fund-backed investments in 2023 was the real estate industry, dropping from its $1.04 billion in the previous year to only $240 million.
Out of the 10 deals in the last quarter of 2023, six deals included the involvement of either a private equity or venture capital. The biggest transaction was a joint venture that involve the Canada Pension Plan Investment Board (CPPIB) and Blackstone Inc.
This transaction acquired a 20 percent stake in the senior mortgage loan portfolio from the failed Signature Bank that was worth $16.8 billion. The deal was worth $1.2 billion, and the Federal Deposit Insurance Corporation managed to keep an 80 percent stake. The commercial real estate loan portfolio consisted of more than 2,600 loans on retail, multifamily, and office properties that were mainly in the New York metropolitan area.
