These 15 Charts Illustrate The Current U.S. Private Equity Landscape by PitchBook
Being honest, our 2Q 2016 U.S. PE Breakdown is the best thing you can read to catch up on the latest private equity trends in dealmaking, debt usage, EBITDA multiples, exit activity, fundraising and more. It’s completely free and you can access it here.
If you’d rather look over the highlights, we’ve featured the top charts from the report below:
Yarra Square Partners returned 19.5% net in 2020, outperforming its benchmark, the S&P 500, which returned 18.4% throughout the year. According to a copy of the firm's fourth-quarter and full-year letter to investors, which ValueWalk has been able to review, 2020 was a year of two halves for the investment manager. Q1 2021 hedge fund Read More
U.S. private equity activity by quarter
2Q has brought activity back to the trends we previously anticipated, with both aggregate deal value and volume sliding. Overall volume has returned to 2013 levels.
U.S. add-on % of buyout activity
Add-ons retain a commanding proportion and are on pace for another record, though total add-on volume is well behind the past few years.
Median debt percentages for U.S. M&A (including PE buyouts)
The consistent decline in median debt percentages speaks to the wariness of many dealmakers, leading to a more risk-averse approach to deal structuring.
Median EBITDA multiples of U.S. M&A (including PE buyouts)
EV/EBITDA multiples midway through 2016 came in at approximately 11.3x, a whole turn higher than what we saw throughout 2015.
U.S. PE activity by deal size
Sponsors continue to stay active primarily within the core and lower reaches of the middle market, as deals between $25 million and $500 million account for a greater percentage of activity (left) and capital invested (right).
U.S. PE-backed exit activity
Given the slowdown in the number of companies ready to come to market, exits have continued to move considerably lower in 2016.
U.S. PE-backed exits ($B) by type
Strategic buyers remain PE sellers’ salvation, and M&A has been particularly crucial in terms of exit value. Elsewhere, SBOs stood at 42% of all exits in 1H 2016, while IPOs rebounded from the shutout in 1Q.
U.S. PE-backed company inventory by count and year
PE-backed inventory remains full of relatively new portfolio companies, which factors into the decline of exits.
U.S. PE median hold period (years) by exit type and year
Hold periods have dropped across the board. The decrease across the SBO exit type points to a faster recycling of portfolio companies—a consequence of a lack of original targets.
U.S. PE fundraising
Despite a significant amount of capital on the sidelines waiting to be deployed, fundraising performance midway through the year has been rather impressive.
U.S. PE funds (#) by type
Sophisticated restructuring and distressed players have found significant success in 2016 thus far. Energy fundraising has diminished, which isn’t a huge surprise after seeing record commitments last year.
Median U.S. PE fund size ($M)
Both buyout funds and the overall PE fund population for 2016 are at the highest level in years.
U.S. PE funds (#) to hit target
94% of all PE funds hit their fundraising targets through the first half of 2016.
2Q 2016 league tables
To no surprise, add-ons driving investment totals for the most active investors.
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