Private Capital Markets Insights 2024: The Return of Warrants to Mezzanine Debt

Despite the prevailing focus on the public markets, private companies represent approximately half of the world economy, if not more. This is a descriptive article presenting a summary of data and results from the 2024 Private Capital Markets Report, which is the product of the annual private capital markets survey. The annual survey was launched in 2009 and examines the behavior and trends of senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately-held businesses, investment bankers, business brokers, limited partners, and business appraisers. Most of the survey panelists are based in the United States of America, but this is not a requirement. The data set also includes many panelists outside of the U.S. There was a total of 1,143 respondents represented in the 2024 survey. An empirical result of this article is that we test the theory that the recent return of warrants to mezzanine deals is associated with a higher interest rate environment. We find evidence supporting that association. These results may be helpful for academics and practitioners forecasting mezzanine activity and deal terms.