Worldwide, the private equity industry inked $636 billion of investments in 2013, an almost 13% increase over 2012’s total of $565 billion, new PitchBook data show. A large chunk of that increase came from two take-private buyouts, Dell and Heinz, which accounted for a combined $48.1 billion of the $71 billion difference.
While total capital invested was up last year, deal activity receded 5% from 2012 levels and hit its lowest mark since 2010. In fact, two deal characteristics long associated with the PE industry, platform buyouts and deals for North American-based companies, both saw noticeable declines last year. Traditional buyouts, for one, slid 13% in 2013 to 1,262 deals, which was even less than 2010’s 1,313 buyouts. North American companies didn’t garner as much attention last year as they did in 2012, either. The continent saw a 12% decline in PE investments last year compared to 2012, the first such decline in several years. Europe, on the other hand, is becoming a bigger and bigger target for the industry. Both deal activity and capital invested gained significantly in 2013, up 18% and 52%, respectively, from 2012 levels. Meanwhile, global growth/expansion investments declined in 2013 to 897 deals, down about 4.5% percent from 2012’s 940 deals.
Exit activity didn’t change much from 2012 levels, with the number of global exits rising only 2% and declining 4% in terms of exited capital. European exits did much of the heavy lifting in 2013, gaining 65% over 2012 levels (407 exits in 2013 compared to 249 the year before). North American exits didn’t fare nearly as well, actually declining about 19% from 2012. Global secondary buyout activity remained static in 2013, both in terms of deal activity (481 in 2012 versus 480 in 2013) and capital exited ($77.5 billion versus $78 billion). The number of IPOs globally increased by almost 52% in 2013 (to 100 offerings), surpassing even 2010’s big year of 91 offerings.
The fundraising trail looked to be a bit smoother in 2013. Total capital raised increased by 59% over 2012, from $188.1 billion to $299.6 billion. Moreover, the percentage of funds that hit their targets in 2013 rose more than 10 percentage points to 68% (from about 57% in 2012), with average time to close a fund dropping from 13.1 months in 2012 to 11.2 months last year.
There weren’t as many freshman funds in 2013. First-time funds dropped precipitously from 105 in 2012 to 74 in 2013. LP commitments are increasingly heading toward bigger, more experienced money managers, four of which raisedvehicles eclipsing the $10 billion mark in 2013 (CVC Capital Partners, Warburg Pincus, Carlyle and Silver Lake).
“Private equity activity started off slow in 2013, but built momentum in all stages throughout the rest of the year,” said John Gabbert, CEO of PitchBook Data. “Fundraising and exits should continue to improve, but with $715 billion in global dry powder, making investments will be a focus for PE firms in 2014.”
Check out PitchBook’s 2013 Global PE Datagraphic below for more details on the year in private equity.
Datagraphic by Jennifer Sam and Tessa Griffin
Featured image of Henry Kravis courtesy of the World Economic Forum