The Rise of Growth Deals: Another PE Model for a Post-Crisis World
April 23, 2014
In the larger scheme of private equity investing, growth equity generally takes a back seat to buyouts, particularly larger ones, which receive most of the press and generally set the tone for how the industry is covered in the news media. For example, just last year—when the Heinz and Dell deals were being finalized—there were numerous articles about a resurgence of mega-buyouts, but aside from those two $20 billion+ deals, the resurgence never really materialized. Instead, the PE industry has shifted its attention to add-ons and growth equity rounds.
The number of U.S.-based PE growth/expansion deals, according to the PitchBook Platform, has grown from 391 in 2009 to a record-high 583 last year. The first quarter of 2014 saw 135 growth deals, putting 2014 on pace for another big year for growth investments. This increase in PE growth deals has coincided with a shift in how PE firms approach their investments.
To read more about this shift on the PitchBook Blog, click here.