Indications were evident last year that the latest buyout cycle has begun to slow, with U.S. PE deal count falling over 8% YoY—the first substantial drop in activity since 2009. A similar downward trend has been tracked to start 2016, with 515 PE deals in January across the U.S. and Europe marking a 20% dip from December and a 42% drop on a yearly basis. The inventory (or lack thereof) of attractive companies continues to hamper dealmaking, along with competition against cash-laden strategics and concerns surrounding debt financing.
PE exit activity has also fallen. January recorded 124 sales in the U.S. and Europe, a drop of over 30% MoM and YoY, as GPs last year took advantage of a robust seller's market. Any increased volatility in the markets, however, could suppress M&A activity by larger strategics and put a damper on exit channels, though fairly stable activity in 2015 suggests an appetite for PE-backed holdings could persist throughout the year.