Research

FY 2016 Summary - Private Equity Review & Outlook

Highlights



  • Investors love private equity. US private equity and venture capital markets experienced strong fundraising environments in 2016, attracting the highest volume of investor commitments since the global financial crisis for private equity funds, and since the millennium for venture capital funds. Europe also had a robust fundraising year. Giant Chinese government-backed funds lifted the Asia-Pacific fundraising volume.

  • Private equity deal-making improved in spite of the politically uncertain environment. New buyout deal volume and deal flow increased in the US, aided by the resurgent supply of leveraged loans and despite Brexit, the UK and continental Europe saw increases in deal numbers. US venture deal-making became more conservative after the unicorn fever experienced during 2015 as indicated by the moderation of pre-money valuations across investment rounds.

  • Exits gained traction after a slow start in 2016. PE/VC-backed IPO activity was subdued in what was a challenging IPO environment. However, cash-rich corporations and well-capitalized buyout funds supported robust exit activity across private equity and venture funds. Furthermore, dividend recapitalizations soared as credit markets conditions improved.

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