U.S. private equity activity during the first quarter of 2011 remained steady with 377 completed PE deals involving $28 billion of invested capital, 83 exits totaling $24.4 billion and 30 closed PE funds raising $25.3 billion in commitments. Deal activity dipped from 4Q 2010 due to the push in deals that occurred in response to the year-end tax law deadline (which was eventually pushed back), clearing out a large inventory of PE deals that were in the works. Compared to 3Q 2010, the first quarter was largely flat, a positive sign that private equity deal flow in 2011 will be similar to last year’s levels or could possibly climb in the second half of the year. The middle market continues to be the driver behind private equity activity, accounting for over 53% of deal activity in the first quarter of 2011. Most of these companies received their first outside institutional investment as their owners looked to private equity investors for growth capital, liquidity and operational experience.

There were a number of bright spots and interesting trends that emerged during the quarter that will be worth keeping an eye on over the next few quarters. One of the most significant was the return of available financing for mega-deals and thus a return of those multi-billion dollar transactions. There were four deals over $2.5 billion during the first quarter, surpassing 2009’s total and putting 2011 on track to double 2010’s total of eight. A trend that has been ongoing over the last few quarters and continued through the first quarter was the increase in the size of exits, especially in PE-to-PE sales. A third bright spot was private equity fundraising, which, with $25 billion raised and funds again surpassing their targets by significant amounts, is showing new signs of life. Look for the rest of the year to build upon this solid foundation as PE firms put their $490 billion of available capital to work, hunt for exit opportunities for the estimated inventory of 4,000 mature PE investments and begin fundraising again.

Full report embedded below:

PitchBook PE Breakdown 2Q2011

H/T to Street of Walls