Research

Q3 2016 Summary - Private Equity Review & Outlook

Highlights

  • US fundraising continued at a robust level, driven by technology-focused buyout funds as well as venture capital funds. European private equity funds continued to attract investor capital at a record pace. The emergence of Chinese state-backed private equity funds lifted fundraising volume in the Asia-Pacific region, while fundraising from conventional institutional investors remained subdued.

  • The continued recovery in leveraged finance markets supported growth in the US buyout activity. The UK’s vote to leave the European Union dented the buyout deal-making pace throughout Continental Europe. However, investments in small and mid-sized companies in the UK continued at a robust level. Buyout acquisition prices tempered for mid-market deals but remained elevated for large-cap deals, both in the US and Europe.

  • Venture capital deal-making improved. However, a slowdown in investments from non-venture fund investors affected deal volume, primarily in the late stage segment.

  • Exit activity continued to improve in the US as cash-rich corporations remained a resilient source of liquidity for private equity and venture capital funds. Trade and financial buyers retrenched in a slower European M&A market, while scattered large trade exits and IPOs helped mitigate a broader decline in European exit volume. Innovation-driven European VC-backed companies continued to generate liquidity at a steady level.

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