The Reports of PE Large Buyout’s Death are Greatly Exaggerated…
“PE’s megafund era is over.”
That is according to the attached PitchBook downloadable report. The Mark Twain quote: “the reports of my death are greatly exaggerated” comes to mind…
From the article: “Leveraged buyouts are shrinking, and the median take-private deal size has halved. Middle-market funds — vehicles that raise between $100 million and $5 billion — are outperforming their larger counterparts. And middle-market funds are pulling in their biggest share of private equity capital commitments in a decade. “
Here at E78 Partners, we are focused on supporting middle market Private Equity Sponsors. We are most definitely seeing an uptick in activity. Our experience is that even in this challenging environment, middle-market activity is alive and well.
Many buy-and-build and add-on PE strategies require less debt capital. The companies are smaller, the fund sizes are smaller, but the opportunities for outperformance remain large.
Not So Fast…
However, I wouldn’t yet write the obituary for large buyout deals. Different PE strategies are more effective during different macro environments. Smaller, middle-market deals are performing well right now. Expect that to continue.
