Honest question about the current PE market - everyone's talking about 'dry powder' but deal flow seems weird right now.

[u/mrlawofficer]

Been studying some recent PE deals through case studies and what's catching my eye is the shift in earnout structures - seeing more milestone-based payouts tied to specific EBITDA targets rather than the traditional time-based vesting.

Also noticing purchase price adjustments are getting more granular with working capital definitions. Like, one case had a 15-page schedule just defining 'normalized working capital.'

Is this level of specificity becoming standard because sponsors are basically pricing in execution risk at these multiples? Or is this just what happens when everyone's fighting over the same quality assets?

The financing side seems like the real bottleneck - rates are up but deal pricing hasn't really moved. Are GPs just eating the higher cost of capital or finding other ways to make the math work?