Seattle (MMD Newswire) April 8, 2010 -- PitchBook Data, Inc., an independent private equity-focused research firm, has released a preview of its quarterly U.S. private equity breakdown report covering investment, exit and fundraising activity during the first quarter of 2010. PitchBook's data shows that the slow revival of U.S. private equity investment continues to take hold with the third straight quarterly increase in investment volume. The first quarter ended with a total of 300 U.S. private equity investments, totaling $14 billion of invested capital.
"The private equity industry is finally seeing the light at the end of the tunnel as the strains of the credit crisis have eased and the economy continues its recovery. Investors have always been actively searching and finding attractive investment opportunities," said John Gabbert, CEO & Founder of PitchBook, "but now the bid ask gap is crossable and debt financing is becoming cheaper and easier to secure."
• Private equity firms completed 300 investments in U.S. companies during the first quarter, the highest total since the fourth quarter of 2008 and slightly more than the 287 PE investments closed in 1Q 2009.
• The top industry for private equity investment was Business Products and Services with 99 deals, followed by Consumer Products and Services with 57 deals and Healthcare with 40 deals.
• The lower-middle and middle-market ($250 million and below) continued to represent the vast majority of PE investment during the quarter, accounting for 85% of the deal flow.
"As the economy continues to stabilize, the middle-market is emerging as the principal market for private equity deals in 2010," added Lee Duran, National Director of the Private Equity Practice at BDO. "While invested capital was down, deal volume was up in the first quarter, and we are optimistic that middle-market private equity investments will remain robust looking further into 2010."
• The strengthening debt markets and with them the possible return of mega-LBOs (buyouts over $2.5 billion) can been seen with the closing of the $5.2 billion IMS Health LBO, the first deal over $2.5 billion since 1Q 2009.
• Add-on acquisitions made up 32% of private equity deals during 1Q, the highest level since 3Q 2007, showing that PE firms' continued using their financial strength to take advantage of industry consolidation and opportunities to add additional products and markets to existing portfolio companies.
• Private equity exits surged to their highest level in over a year with 71 completed exits totaling $7.85 billion.
• 19 U.S. private equity funds reached a final close during 1Q, totaling $14 billion in commitments, a significant decline from the 39 funds closed in 1Q 2009 with $61 billion in commitments, showing that the fundraising climate remains difficult as PE firms deal with the current $400 billion capital overhang and limited partners contend with allocation issues and large portfolios of unfunded commitments.
The PitchBook 2Q 2010 Private Equity Breakdown sponsored by BDO with more in-depth analysis on PE investment, exit and fundraising trends will be released next Wednesday April 14, 2010. To learn more about PitchBook, please contact us at 877-267-5593.
About PitchBook www.pitchbook.com
PitchBook Data, Inc. is the only private equity-focused research firm that comprehensively covers the full private equity lifecycle. The flagship PitchBook Platform provides clients with unparalleled information and analysis on over 29,000 private equity deals, 10,600 investors/corporate acquirers, 9,500 funds, 4,500 professional service providers, 1,700 limited partners and 115,000 industry professionals.
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