1."The lower middle market (LMM)—enterprise values between $25 million and $100 million—saw deal value increase by 21.3% in 2016, across approximately the same number of transactions as the year prior. Meanwhile, 28.5% fewer deals were completed in the upper middle market (UMM)—deals between $500 million and $1 billion—accounting for a 20.3% decrease in value. With the move to lower enterprise values, the median transaction size decreased to $134 million in 2016, the lowest in three years."
2."The US PE middle-market company inventory is increasingly concentrated in relatively younger companies. Middle-market businesses make up just over 74% of all PE-backed company inventory in the US."
3."In our Annual US PE Breakdown, we observed that larger funds have had more success and accounted for higher proportions of total capital commitments. This trend, however, is markedly different in the middle market. Average buyout fund size decreased by 19.4% last year to $687.9 million. As firms target more LMM companies, the average check size for equity contributions will come down, which could be contributing to the decrease in fund size. The PE market is showing signs of splitting itself into two distinct segments: larger, more institutionalized firms and smaller, possibly nimbler specialty buyout shops, such as those focused on the LMM."