The U.S. PE middle market slowed down in line with an overall PE slump carrying over from the back half of 2015. However, in a stormy environment, the lower segment of the middle market has been a ray of sunshine. Capital invested in deals between $25 million and $100 million ratcheted up over 80% QoQ in 1Q 2016. In line with the shift to smaller companies, we have seen a raft of LPs targeting smaller funds. As the investment cycle shifts, LPs have identified the relative attractiveness of the private equity asset class, and look to more nimble niche vehicles positioned to deploy capital opportunistically.
In summary, the divergence between the upper and lower middle market is symptomatic of the shifting environment. PitchBook’s 1Q 2016 U.S. PE Middle Market Report breaks down the middle market investment landscape, examining deals by segment, sector and type, alongside exit and fundraising activity. Developed in partnership with ACG and co-sponsored by Madison Capital Fundraising, the report also includes:
Commentary on the U.S. labor market from Joe Brusuelas, Chief Economist, RSM US
Q&A with Amber Landis, VP of Public Policy, ACG Global
Lender Q&A with Madison Capital Funding's Daniel Brazier and Chris Taylor