Middle-Market Private Equity Trends 1st Quarter 2016

With a tremendous amount of capital remaining to be deployed, dealmakers are forced to move more carefully before pulling the trigger.   The latest study from PitchBook reviews recent trends.

When Do You Expect to See Deal Making Accelerate?

While most global PE trends these days are pointing downward, which is argued as a natural part of the up-and-down investment cycle, there were some 1Q 2016 numbers in PitchBook’s U.S. PE Middle-Market Report which caught our eye.

81.5% –> 1Q 2016 quarterly increase in the lower middle market segment deal value

$47 billion –> last quarter’s capital invested in core middle market transactions, the most since 1Q 2015

79% –> Quarter over quarter drop in upper middle market deal volume

7.4 years –> median holding period for a middle market company exit via corporate acquisition in 1Q 2016. (2015’s median was 5.3 years)

68% –> 1Q 2016 MM funds closed with between $100M and $500M in commitments, up from 59% in 2015 and 52% in 2014

PitchBook defines U.S. middle market activity as companies acquired through buyouts valued between $25M and $1B; lower middle market: $25M to $100M, core middle market: $100M to $500M, and upper middle market: $500M to $1B.