Tuesday, May 5, 2015

1Q15 Private Equity Environment Review

The first quarter of 2015 saw a separation in trends across industry metrics. Global fundraising, IPO issuance, and U.S. venture capital investment activity all fell from the prior quarter. In contrast, U.S. and European buyout investment activity increased from the fourth quarter of 2014. Looking forward, the decline in energy commodity prices will have an impact existing energy-related private equity portfolio companies, as well as possibly provide attractive opportunities for private equity firms to deploy capital in the sector.

Some additional notable observations from the report include the following:
  • Average leverage multiples for U.S. buyout transactions declined from 5.7x to 5.4x in the first quarter of 2015 from the prior year’s average 
  • 32 companies completed their IPOs on U.S. exchanges—a 50% decrease from both the prior quarter and the year-ago quarter. 
  • The average equity contribution rate for a U.S. buyout transaction completed in 1Q15 was 39.4%, compared with 37.3% for all of 2014 
  • Venture capital–focused funds experienced an upsurge in fundraising, raising $13.5 billion during the quarter
  • PE firms raised $72.7 billion in 1Q2015, 19% decline from the prior quarter and 10% decline from the year ago quarter,

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