Preqin's latest data findings show what many of us have been seeing for some time, capital distributions significantly lag capital inflows. The expectation is that a significant portion of the capital inflows relate to already committed capital that was available to be called from investors (the so-called ‘wall of capital’ that it’s often been referred to), rather than new capital raised, simply given the tougher fundraising market that has been seen over the last couple of years.

While this mismatch can't continue indefinitely given the limited supply of capital available for deployment into the industry, what we have seen is a proliferation of continuation vehicles, NAV financings, secondary transactions, fund extensions etc. 

A question being asked a lot at present is what will it take to really get the transactions market going again. Interest rates is an obvious one. The clear pricing mismatch at present between asset sellers and buyers, leading to a stagnated marketplace, would undoubtedly be bridged by a more (relatively) palatable cost of capital.  But will that be enough? Interest rates can stay higher longer than a fund's term… including extensions!