Private Equity Fundraising Is Sitting Pretty in 2017—PitchBook Report
The first half of the year has been good to PE as investors continued to commit capital and funds steadily put their dry powder to work.
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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