| This morning PitchBook released its report on 2016 private equity activity. It’s not great. Deal volume is down. Deal multiples are up. Equity contributions are up. Exit values are down. Fundraising is down. PitchBook calls this a “return to normalcy” from the record-breaking highs of 2014 and the “turning point” of 2015. The breakdown: |
| • Deals: Private equity firms invested $649 billion into 3,538 deals last year. That’s down 12% by value and 14% by volume from the year prior. |
| • Multiples: Median enterprise value hit 10.9x EBITDA for M&A transactions last year, up from 10x in 2015 and 8x in 2010. Why? Too few feasible investment opportunities, PitchBook posits. |
| • Debt-to-equity: The median debt percentage for private equity and M&A deals fell to 50.5% of the enterprise value, compared to 56.8% in 2015. Buyout shops are having to contribute more equity to deals. |
| • Exits: Buyout firms pulled $316 billion on 1,097 exits in 2016. That’s down 22% by value and 18% by volume from 2015. |
| • Fundraising: 11% fewer private equity funds raised money last year than the year prior, and commitments were down 12%. |
Source: Pitchbook
