Confronted by higher interest rates and diverging views on valuations, private equity dealmakers have increasingly turned to equity rollovers to unlock transactions, with more than half of mid-market deals reportedly doing so last year. In a recent report, Goodwin found that 57% of US mid-market deals featured equity rollovers in 2023, up from 46% in 2020. It attributes the increase to ‘a climate of economic uncertainty and challenging debt-financing markets. You can't really overstate the impact that increased borrowing costs have had on deals,’ Zachary Lupu, partner in the Private Equity practice in New York at Goodwin, and co-author of the report, tells Preqin News. "It has become imperative for sponsors to find alternative sources of acquisition financing, and so an increased reliance on rollover really helps fill that void."