Despite a tighter policy environment, European private equity (PE) dealmaking continues to be incredibly resilient in H1 2022. Sponsors’ record dry powder levels, and the rise of private credit funds has kept the deals environment moving, as the syndicated loan and high yield debt markets come under stress. Sponsors doubled down on their investment sweet spots, as they were able to take advantage of softer multiples. Take-private and carveouts are expected to be standout themes of 2022, due in part to falling stock markets and companies de-leveraging to strengthen balance sheets. The business products & services sector roared to new highs in the first half, while sponsors continued to double down on information technology (IT) assets, which accounted for nearly one quarter of PE deal volume. In the second half of the year, we expect a more pressurised dealmaking environment due to hawkish forward guidance, slowing GDP growth, rapidly declining consumer confidence, and increasing interest rates, which is likely to cause a recession.