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April 09, 2019 No Comments Author: Andy Jones

Investment Banks Firm Size

While we often think about investment banks being large-scale entities, the truth is, most investment banks are quite small.

Pulling the number of deal makers per firm from our M&A Research database at Private Equity Info, I found the median investment bank has only four deal makers. Said another way, half of the investment banking firms have 4 or fewer deal makers.

Further, 90% of the investment banks have 12 or fewer deal makers.

The histogram below shows the breakdown.

Investment Banks Deal Makers per Firm

 

March 08, 2019 No Comments Author: Andy Jones

Private Equity – Acquisition Criteria Metrics

We have previously reported that private equity, as an industry, is moving down market, increasingly investing in smaller deals. The question is, what company size ranges attract PE firms? In other words, how small, how big and are there any sweet spots in terms of preferred portfolio company size for new platform acquisitions?

The Data

Compiling data from www.PrivateEquityInfo.com, the charts below show the platform acquisition criteria metrics for the private equity firms in our database.

To simplify, each chart shows the minimum requirements for each metric (for example, minimum revenue, min EBITDA, etc.). We also have data on the maximum range for each metric, but I will group those together for a later study. In other words, this study is about the minimum deal size requirements for private equity firms.

To be clear, this data is not based on transaction comps, but on the stated, desired range for platform acquisitions. (Note: we only record the size preferences for platform investments because there are often no minimums for add-on investments).

Minimum Revenue

  • 60% of PE firms will look at deals with revenue less than $10 million.
  • 88% of PE firms will look at deals with revenue less than $25 million.

Private Equity Acquisition Criteria - Min Revenue

February 28, 2019 No Comments Author: Andy Jones

Private Equity Portfolio Trends – Software & SaaS

I previously wrote about the trend of declining private equity investments in manufacturing and the subsequent increase in investments in Healthcare & Pharma and Technology companies, (as a percentage of the total number of platform portfolio companies acquired). To conclude this series that explains the shift in investment focus from manufacturing to other sectors, the graphs below also show a significant increase in private equity investments in Software and Software as a Service (SaaS) companies.

As a percentage of the total platform investments made by private equity firms, software has doubled, from ~5% of deals to nearly 10%.

Private Equity Investment Trends in Software Companies

February 25, 2019 No Comments Author: Andy Jones

Private Equity Portfolio Trends – Technology

I previously wrote about the trend of declining private equity investments in manufacturing and increasing investments in Healthcare & Pharma companies, (as a percentage of the total number of platform portfolio companies acquired). As a continuation of this analysis, the chart below shows a similar upward trend for private equity investments in Technology companies… now equal to the level we saw in 2000, at the peak of the first dot.com bubble.

Private Equity Investment Trends in Technology Companies

Want to see a similar trend line for a particular industry? Email me to discuss custom research options (ajones@privateequityinfo.com).

 

 

February 20, 2019 No Comments Author: Andy Jones

Private Equity Portfolio Trends – Healthcare and Pharma

I previously wrote about the trend of declining private equity investments in manufacturing companies, (as a percentage of the total number of platform portfolio companies acquired). So, where is the focus shifting? The next few blog posts will aim to answer this question by looking at investment trends in different sectors.

This post is about private equity firms investment trends in Healthcare & Pharmaceutical companies.

The chart below shows PE platform investments in healthcare companies steadily increasing. Private Equity Investments into Healthcare Companies

February 13, 2019 3 Comments Author: Andy Jones

Private Equity Portfolio Trends – Manufacturing

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.

Private Equity Trends in Manufacturing

January 27, 2019 No Comments Author: Andy Jones

Private Equity Fund Raising Trends

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.

# of new investment funds

NOTE – venture capital funds continued to increase in quantity as well while hedge funds have remained fairly constant.

How Big are the Private Equity Funds?

January 17, 2019 2 Comments Author: Andy Jones

Private Equity Holding Period Distribution – 2018 Exits

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.

Private Equity Holding Durations - 2018