This year could rival 2007 for private equity fundraising if limited partners keep up their current pace of capital commitments, a new report from PitchBook shows.
The “2Q 2017 U.S. PE Breakdown” report, released in partnership with Merrill Corporation and Murray Devine, shows that capital commitments are on pace to surpass $220 billion by the end of 2017.
U.S. PE funds continue to put money to work, despite hard-to-find quality targets and high prices. M&A EBITDA multiples have dipped to 10.5 times in the first half of this year, only slightly down from their post-recession high of 10.7 times in 2016.
Despite those headwinds, PE investors spent $151.1 billion across 866 deals in the second quarter of this year, buoyed by high-yield credit spreads and more than half a trillion dollars in dry powder.
The upper middle market saw an increase in its share of total deals in the first half of 2017, while so-called megadeals—worth at least $2.5 billion—lost ground. Merely five such deals closed, the lowest number since 2012, reflecting a slowdown due to competitive corporate bidders.
The information technology sector has continued to be popular among investors. Meanwhile the energy sector has struggled amid price fluctuations and excess global supply.
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