Private equity portfolio company data from Private Equity Info shows clear trends of how private equity firms invest in certain industries over time. The graph below shows the investment trend for manufacturing, from 1990 through 2018.
Private equity investments in manufacturing companies, as a percentage of the total number of platform portfolio companies acquired, continues to decline.
On occasion, we hear people say, “I didn’t know you could do that”. So, we created a series of One-Minute Video Demos to better highlight key search features.
U.S. private equity firms collectively raised $462 billion in 2018. While this is considerably less than the $695 billion raised in 2017, it is still a significant increase over 2015 and 2016.
The chart below shows how the $462 billion in 2018 fund raises were distributed by size. As previously reported, the median fund was $30 million.
The trending private equity investment sectors for December 2018 are highlighted below with a few example transactions.
2018 showed a record number of new private equity funds raised. This continues the upward trajectory in terms of the number of new funds each year.
NOTE – venture capital funds continued to increase in quantity as well while hedge funds have remained fairly constant.
I recently updated our PE portfolio company holding period study to include 2018. In this, I report the median holding period at exit.
Today, I’m showing the quartile spread of that same data.
Our private equity database recorded 998 portfolio company exits in 2018. This is considerably fewer exits compared to recent years.
Year – # of Exits
2018 – 998
2017 – 1,316
2016 – 1,263
2015 – 1,351
2014 – 1,291
As previously discussed, the median holding period declined to 4.7 years in 2018, down from 5.0 in 2017. The chart below shows the holding period distribution for 2018 private equity company exits.
I recently spoke to Bill Welch with E&A Companies. With some minor edits, the text below captures our conversation.
Bill Welch
E&A Companies is not a private equity firm. We consider ourselves primarily as business operators. Our Founder and Chairman started the business 40 years ago to acquire, actively operate and grow businesses. We don’t have any outside investors. We have no limited partners. The money we invest in a business (along with conservative bank leverage) is one hundred percent the personal liquidity of our two Partners – Alan Hubbard and Devin Anderson.
I periodically update the private equity portfolio company holding periods study to track this trend over time. In both March and August 2018, I reported a slight downward trend in portfolio company holding durations. That trend continues with this update, although more steeply downward.
Now accounting for all 2018 exits tracked, the holding period has continued to decline. For 2018 exits, the median holding periods is 4.7 years, down from 5.0 years for 2017 exits.
The chart below shows the median holding period for the portfolio company exits each year.
The trending private equity investment sectors for November 2018 are highlighted below with a few example transactions.
Industry Trends Report
