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.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
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.
Fig 2 U.S. private equity investment volume contracted by 1% from the previous quarter.
Fig 3 The proportion of equity financing for U.S. leveraged buyouts remained at 42%.
Fig 4 Capital raised by U.S. private equity funds declined from the previous quarter to $30 billion.
Fig 5 Global callable capital reserves (“dry powder”) of buyout funds increased to $467 billion as of June 2015.
Fig 6 U.S. private equity exit volume grew from previous quarter levels to $125 billion.
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.