Preqin’s latest research is reporting a big jump in buyout dealflow in the first nine months of the year compared to 2012. It is up 19% on the same period in 2012. Preqin says that this “demonstrates private equity fund managers continue to find good opportunities for investments, despite some concerns that deal flow is decreasing”.
The aggregate value of private equity-backed buyout deals so far in 2013 stands at USD 217bn, an increase compared to USD 182bn for Q1 to Q3 2012. This is positive and contrasts with the fact that the third quarter report says that a total of 666 private equity-backed buyout deals were announced in Q3 2013 valued at an aggregate USD 60bn, representing a decrease in aggregate value compared to the previous quarter when 654 deals were valued at USD 67bn.
Private equity-backed exit flow also declined, with 289 exits valued at USD 63bn in Q3 2013 compared to 344 exits valued at an aggregate USD 94bn in Q2 2013.
Other Key Facts
- North America has more than twice the volume of Europe for PE backed buyouts in the third quarter (USD 36bn in Q3 2013 USD 15bn)
- Buyout deal flow in Asia was up, with USD 7.1bn worth of deals in Q3 2013 compared to just USD 2.5bn in Q2.
- 43% of all deals in Q3 2013 were leveraged buyouts, and these accounted for 66% of the aggregate value of global deals in Q3 2013.
- Small caps rule with 77% of all deals in Q3 2013 (less than USD 250mn in size), whereas large-cap deals (those valued at over USD 1bn) represented 6% of the number of all global deals.
- The industrials sector was again the most prominent sector in terms of the number of investments, accounting for 21% of all deals in Q3 2013, while consumer/retail sector accounted for the largest volume of capital invested in Q3 2013 at 30%.
- The largest private equity-backed buyout deal this quarter was the USD 6bn secondary buyout of
- Neiman Marcus Inc. by Ares Management and CPP Investment Board from TPG and Warburg Pincus.
Positive news came from Preqin also this week that fundraising volume is up for PE teams this year too. Its latest fundraising research shows 179 private equity funds closed in Q3 2013, securing an aggregate USD 87bn, a figure which is expected to increase by 10-20% as more information becomes available. A total of 606 funds have closed so far in 2013, which is less than the 684 funds which closed between Q1 and Q3 in 2012.