Halfway through 2019, private equity deal markets around the world are tracking slightly lower in both the number and value of the deals than a year ago. Two forces account for this dip, according to Bain’s analysis. The first of these are variety of macroeconomic and geopolitical forces. Deal count in the UK, for example, is down substantially thanks to the looming shadow of Brexit. And the second challenge private equity funds face is a familiar one: competing with corporate buyers in a hot merger market.
While overall deals are down slightly, take-private transactions are the exception. Recent big deal announcements in Europe (for example, Axel Springer and Merlin Entertainments) and the US (for example, Ultimate Software) put 2019 on pace to hit a record number of public-to-private transactions for the industry, surpassing even the boom years of 2006 and 2007.
Exit activity also remains very strong, driven in part by the same corporate buyers snatching up private equity-owned assets globally, as well as by an active IPO market in the US. (Watch Bain Partner Jayne Zecha discuss the IPO market on CNBC.)
At the same time, fund-raising continues unabated, with private equity firms taking advantage of the opportunity to launch new funds. Traditional buyout firms continue to push into different flavors of equity products, such as long-duration buyout funds, sector-focused funds, growth equity and middle-market.
For more on Bain’s private equity research and views, see Bain’s Global Private Equity Report 2019.