Interpreting Pitchbook’s M&A Report for Human Capital Investing

The latest Pitchbook data identifies several bright spots amidst structural headwinds in its just-released M&A report. Hunt Scanlon Ventures managing director, Cody Crook, unpacks what it all means for human capital markets.

Despite harsh macroeconomic headwinds that persisted most of last year, above average deal flows persisted in 2022. But, according to the latest research from Pitchbook, it was a marked slowdown in activity from 2021, a record shattering year for M&A.

What threw markets off course? According to Jinny Choi, a PE analyst at Pitchbook, staggering inflation led central banks to aggressively raise interest rates in 2022. The U.S. Federal Reserve announced seven rate hikes during the year. Europe also moved away from quantitative easing, leading the Bank of England to raise rates nine times over the same period.

Undaunted, said Ms. Choi, buyers took advantage of cheaper prices, with median deal multiples declining to 8.8x EBITDA. Other factors supported M&A activity, too. PE firms still have $1.3 trillion of dry powder to invest around the globe, enabling sponsors to capitalize on attractive deals spurred by the market downturn that resulted in lower valuations.

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2022 also saw a shift to smaller deal sizes, with investors focusing on add-on acquisitions (a record breaking 71.9% of buyouts) rather than larger platform purchases. Through lower multiples and smaller deals, PE firms have been reevaluating their strategy as they begin to pursue deals in 2023.

So, what’s this all mean for M&A activity across the human capital market in 2023? Cody Crook, Managing Director, Hunt Scanlon Ventures, offers up good reasons to be optimistic.

Cody, pick a word to describe M&A activity in the human capital sector.

Robust. From our unique vantage point deal flow has been very strong. We have closed more than a dozen transactions across the sector – from firms specializing in executive recruiting and culture consulting to leadership assessment and interim solutions. We see M&A activity picking up at a feverish pace in 2023, not slowing down.

From Pitchbook’s market summary, can you extrapolate why human capital will continue to be a hot space for M&A activity?

Pitchbook highlighted how shifting economic trends in the post-pandemic economy are driving acquisitions. In our view, few spaces have been more profoundly affected by the pandemic than human capital. The pandemic and ensuing labor shortage highlighted the importance of having the right talent in place. Organizations with strong leadership, strong cultures, and strong human capital recruiting programs were able to adapt to shifting operating conditions more quickly than competitors who were weak in these areas.

What types of deals over the last year or so stand out?

Of course, I like the deals we were involved in more than those we were not! Opening new channels or creating platform plays for private equity firms is exciting for us. Introducing blue chip investors to the human capital space is something else we pride ourselves on.


Our referral of Bespoke Partners, a software recruiting vertical specialist, to AEA Investors pushed on all three of those levers I mentioned above. Opening up a cybersecurity recruiting lane for ShoreView’s Diversified Search Group platform is another good example. And bringing climate tech recruiting leader Hobbs &Towne to LLR’s True platform was super exciting. Each represented a leader in their respective field.

What’s in the deal pipeline for Hunt Scanlon this year?

Our team is focused on a few things as we kick off 2023. London excites us. We have a number of U.S. based buyers seeking deals in London, and we have sellers on the other side of the pond interested in making a move. So that mandate will keep us very busy this year. Private equity firms continue to look for a toehold in human capital markets and so we are hunting down deals for them. We are also super bullish on the generative AI space — that technology will bring exciting new change to every business it touches. Hunt Scanlon Ventures just participated in the latest funding round for AiFlow, an innovative AI-powered market research platform catering to private equity firms. Their software compiles data that would take an entire team of analysts weeks to gather. AiFlow is a classic disruptor that will bring a competitive edge to the companies they serve via state-of-the-art large language model technology. Integrating ChatGPT language models into private equity will be a game-changer. Scott Scanlon and I serve as advisers to the founders and we believe AiFlow will become an anchor investment for our Ventures platform.

Any particular sectors you’re looking at?

We like the leadership consulting space. We love AI and tech enabled recruiting platforms – we have a number of those potentials fanning out to our VC partners at the moment. We also like this whole area of integrated talent solutions. DE&I and culture consulting, which fits hand in glove with recruiting, we are also bullish on. Big potential there for us, and for the industry at large.

Clarke, Tim, et al. 2022 Annual Global M&A Report. Pitchbook, 25 Jan. 2023,

Article By

Cody Crook

Cody Crook

Managing Director, Hunt Scanlon Ventures

Cody Crook is managing director and head of investment strategy at Hunt Scanlon Ventures - an M&A advisory firm that specializes in the human capital space. Cody is responsible for co-managing the firm's investment portfolio, which includes executive search, talent acquisition, private equity, and investment firms. Leading the investment team, he spearheads all fund transactions and maintains portfolio developments. He is also responsible for sourcing, managing and monitoring investments and working with external portfolio managers, analysts and investors on active and prospective transactions. Connect with Cody.

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