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January 17, 2022 No Comments Author: Andy Jones

Private Equity Portfolio Aging

Portfolio company aging stats are dictated by past acquisition activity and exit rates over time.

As portfolio companies grow older in their respective funds, they age out, via an exit, often within 3 – 7 years. Portfolio companies in the 5 – 7 year vintage signal potential near-term transactions – deal flow – the lifeblood of investment banks, private equity firms, accountants, law firms, and a host of M&A service providers.

For U.S. portfolio companies owned by U.S.-based private equity firms, there are currently:

  • 1,225 portfolio companies currently aged (5 – 5.9 years)
  • 997 portfolio companies currently aged (6 – 6.9 years)
  • 776 portfolio companies currently aged (7 – 7.9 years)

As we previously reported, the median holding period for private equity portfolio companies industry wide is currently 4.9 years. Consequently, let’s look into the 5-year aging mark in more detail.

Turning Five

If we stand on the 5-year mark and look upstream at the parade of portfolio companies approaching their five-year anniversary in their respective funds, we’ll see the monthly aging flow shown in the graph below.

January 07, 2022 No Comments Author: Andy Jones

Top 10 Industries for PE Platform Investments in 2021

We reviewed all private equity platform investments in 2021 and ranked them by industry. The following Top 10 industries represent nearly half of all private equity platform acquisitions in 2021:

TOP 10 INDUSTRIES

  1. Software
  2. Manufacturing
  3. Healthcare
  4. Technology
  5. Food & Beverage
  6. Financial Services
  7. Digital
  8. Education
  9. Industrial Services
  10. E-Commerce

The chart below shows each of these industries as a percentage of the total PE platform acquisitions in 2021. Clearly, Software was the major industry of interest for private equity in 2021, representing17% of all platform acquisitions.

Top 10 Private Equity Industries of Interest in 2021
December 01, 2021 No Comments Author: Andy Jones

International Private Equity Investing in U.S. Companies

Historically, 5% to 8% of U.S. private equity platform acquisitions are made by PE firms outside the U.S.

2019 was the peak for this metric at 7.8%. That is, in 2019, 187 U.S.-based companies were acquired as new platform investments by international PE firms. (Add-on investments include a much larger number of acquisitions by international PE firms.)

The most targeted sectors by international private equity firms in 2021 were: Software, Healthcare, Technology, Data Analytics, and Food & Beverage (in that order).

November 09, 2021 No Comments Author: Andy Jones

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