At a time when high prices and stiff competition make it difficult to find deals, private equity funds are scouring the public markets for prospects. Strong public-to-private activity in the US pushed the value of these deals globally to its highest level since the previous take-private boom in 2006–07. The reason: Despite the run-up in equity prices, public investors often undervalue companies they don’t understand. As Josh Harris, the cofounder of Apollo Global Management, puts it, “That is creating a very fertile hunting ground for private equity.”
Bain partner Hugh MacArthur is a director in the firm’s Boston office and head of Bain’s Global Private Equity practice.
The pendulum has swung in favor of private—will it swing back?