After Record Year, Is U.S. Middle-Market PE Activity Set to Slacken?
November 05, 2015
Private equity investment in the U.S. middle market has not slowed in recent quarters, at least by count, with 499 completed transactions in 3Q. But total capital invested last quarter was down a fair amount from the $91 billion seen in 2Q, leaving 2015 unlikely to match last year's record heights in terms of value. Our 4Q 2015 U.S. PE Middle Market Report, sponsored by Madison Capital Funding, delves into what is driving that decline, covering middle-market investment by segment, region and sector.
Some key data points to consider:
The middle-market proportion of U.S. buyout activity has steadily climbed for years, but at 71.8% in 2014 and 71.5% through the end of September this year, how many more quality targets are there?
U.S. middle-market company inventory stands at close to 6,000 companies. Even though median hold time has fallen by six months through the end of 3Q, there's still a considerable overhang of aging portfolio companies.
Exits are still strong, but beginning to wane, relative to last year's heights. Will exit activity remain strong enough to help reduce the middle-market company inventory?
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