Private Equity Activity Picks Up In Q2 by Private Equity Growth Capital Council

After a slow first quarter of 2015, the private equity industry experienced a revitalization in Q2-2015. Investment dipped by less than 1 percent to $112 billion, holding strong at the second highest Q2 level since 2007. Meanwhile, fundraising fell to $30 billion. Exit volume exploded last quarter to $125 billion—the highest level on record. Some key metrics of the private equity industry in the second quarter of 2015 are:

U.S. Private Equity Investment Volume Decreases

Quarterly U.S. private equity investment deal volume fell slightly from $113 billion in Q1-2015 to $112 billion in Q2-2015.

Current Level – $112 B

Quarterly Change % – -1%

Equity Contributions Hold Steady

Total equity financing for U.S. leveraged buyouts remained at 42% in Q2-2015.

Current Level – 42%

Quarterly Change % – 0%

U.S. Fundraising Levels Fall

Quarterly U.S. private equity fundraising volume declined from $38 billion in Q1-2015 to $30 billion in Q2-2015.

Current Level – $30 B

Quarterly Change % – -21%

Dry Powder Increases

Callable capital reserves (“dry powder”) of global buyout funds increased from $431 billion in December 2014 to $467 billion as of the end of June 2015.

Current Level – $467 B

Quarterly Change % – +8%

Exit Volume Jumps

U.S. private equity exit volume grew from $70 billion in Q1-2015 to $125 billion in Q2-2015.

Current Level – $125 B

Quarterly Change % – +80%

Fig 1 The four-quarter average for exits took a sharp turn upwards in 2015-Q2, while the average for investments and fundraising decreased.

Private Equity Activity

Fig 2 U.S. private equity investment volume contracted by 1% from the previous quarter.

PE Activity

Fig 3 The proportion of equity financing for U.S. leveraged buyouts remained at 42%.

PE Activity

Fig 4 Capital raised by U.S. private equity funds declined from the previous quarter to $30 billion.

PE Activity

Fig 5 Global callable capital reserves (“dry powder”) of buyout funds increased to $467 billion as of June 2015.

PE Activity

Fig 6 U.S. private equity exit volume grew from previous quarter levels to $125 billion.

PE Activity

Appendix: Figure 1

The chart uses three key metrics to provide a summary of overall private equity market trends in the United States:

  • Fundraising volume – net capital commitments secured during the quarter by private equity funds, including buyout, growth capital, infrastructure and energy funds.
  • Investment volume – total reported dollar volume of private equity-backed investment completed during the quarter.
  • Exit volume – total reported exit dollar volume during the quarter, including public offerings and sales to strategic and financial investors.

The value of each factor’s metric for the quarter is the four-quarter rolling average indexed to 2004 levels. When the factor’s metric is at its four-quarter rolling average as of the end of 2004, its value equals 100.