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Back to blog November 14, 2021 No Comments Author: Andy Jones

Average # of Current Portfolio Companies per PE Firm

We’ve been tracking the average number of current portfolio companies held by private equity firms from our M&A Research Database.

Prior to the pandemic, this metric held steady around 9.8 (portfolio companies per PE firm), but began to fall in the Summer of 2020.

Interpretation: PE firms were net sellers in July and August of 2020.

Keep in mind, there’s a delay between the decision to exit and an actual exit. Consequently, a reduction in the average number of portfolio companies held in July and August is the result of an exit process that started 6 – 9 months prior… about the time the U.S. began to realize Covid-19 could product a significant economic disruption.

However, this downward trend reversed as early as September. By October 2020, the average number of portfolio companies had increased to 10.

Again, assuming a delay between LOI and closing, we can infer that many private equity firms had become acquisitive during the peak of the uncertainty surrounding Covid-19. While most PE firms at the time were broadcasting a “wait and see” mode, the reality is, they stepped up acquisitions significantly. Good on them.

PE Firms Accelerated Acquisitions Over the Past Year

Over the past 12 months, this metric has steadily climbed to nearly 11 portfolio companies per firm, approximately a 12% increase from the historical average, shown in the graph above.

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