PE firms closed 445 deals worth $76.4 billion, the preliminary third quarter numbers show. While deal-making saw an uptick from 417 investments in the second quarter, capital invested actually dropped $4.5 billion from $80.9 billion in 2Q 2013. Both the increase in deal-making and drop in capital invested can be attributed to buyouts (including add-ons), which typically make up 70% of all private equity deals in any given quarter.
One interesting trend is the returning growth of add-ons as a percentage of buyouts. After hitting a 53% peak in 1Q 2012, add-ons made up a fluctuating, but smaller, percentage of the buyout pool over the last year. With higher tax rates looming on the horizon, private equity firms in the fourth quarter last year focused mainly on new investments, pushing add-ons acquisitions to the wayside. That quarter, add-ons comprised just 44% of the 547 buyouts executed by PE firms. In 3Q 2013, add-ons were 54% of the 312 buyouts.