Private Equity          Venture Capital      a Structured Funding     b Debt Funding      c "Due-Dililgence"- Scientific Evaluation     b Mezzanine Financing      bh Angel Investment      g Research And Development      k Increase in P.E.R     mm 

Global Outlook

Over the past decade, the private equity industry has been through the throes of volatility and change. It began, in 2006, with the largest deal-making boom in the history of the industry.

  • By 2015, Limited partners (LPs) enjoyed a fifth consecutive year when distributions outpaced capital calls, generating strong net positive cash flows. Their response: substantial increases in allocations & a renewed push to cycle money back into PE, historically the best-performing asset class in most LP portfolios. Since 2013, PE funds raised $500 billion annually worldwide, and uninvested dry powder today stands at a record $1.3 trillion. The past year saw the best environment for fund-raising since the precrash boom.


  • The $175 billion that General partners (GPs) attracted for commitments in new buyout funds came in 11% below the amount GPs had raised in 2014. Despite this, new PE fund-raising encountered the best conditions in years. PE funds are closing faster, and the percentage of funds that hit or exceeded their fund-raising targets was higher in 2015 than at any time since the pre crisis boom of 2007.
  • On the investment front, reported buyout deal value totaled $282 billion globally—the strongest year since the global financial crisis—as dry powder increased to a near-record $460 billion. Asset valuations, already high as 2015 began, rose to 10.1 times EBITDA in the US. Multiples in Europe dipped slightly but remained near all-time highs. The second half of the year brought increased turmoil to the debt markets, as spreads on leveraged loans increased.


  • At $422 billion, buyout-backed exits were just shy of their all-time peak, as GPs completed sales of older vintage fund holdings. Exit activity was robust across all major channels, led by sales to corporate buyers, who accounted for more than $275 billion in asset sales last year. Recent investment activity, far below that of the peak period between 2005 and 2010, portends a falloff in exit activity over the coming five years.
  •  Despite turbulent public markets, private equity continued to post strong returns relative to alternative asset classes. Top-quartile funds are widening their lead over median fund returns for the 2008 and 2009 vintages now coming to realization.


Source: - Bain & Company (Global Private Equity Report 2016)