What will private equity look like next year: PitchBook's 2016 Crystal Ball Report
December 28, 2015
Private equity as an asset class has traditionally outpaced public market returns, yet 2015 brought forward concerns that may be signaling that we are in the later stages of the most recent economic cycle. As outlined in our 2016 Crystal Ball Report, sponsored by R.R. Donnelley, we expect to see volume drop off in 2016 due to a thinning supply of quality targets coming to market, divergent global economic policies and heightened volatility on the public side inducing some caution into the market. The industry as a whole is certainly sitting on ample capital to deploy into targets, yet the same money is chasing similar deals, driving valuations up for top-tier assets. Anything of less-than-optimal quality will likely face issues finding the same multiples we've seen over the past couple of years, and direct lenders will also face fierce competition as they vie to stay higher in the capital structure for quality sponsor-backed deals.
In the first report of its kind, we leveraged a carefully crafted survey to industry professionals including private equity firms, corporate law firms and investment banks, conversations with industry experts and the PitchBook Platform to develop a comprehensive thought process and forecast surrounding what we expect to see in 2016.
We hope you find this report useful and informative in helping aid your prospective market outlook. Click here for the entire report.