The trending private equity investment sectors for August 2016 are highlighted below with a few example transactions.

The trending private equity investment sectors in recent weeks are highlighted below with a few example transactions.

The trending private equity investment sectors in recent weeks are highlighted below with a few example transactions.

We thought you might find it interesting to see the trending private equity investment sectors in recent weeks. These trends are highlighted below with a few example transactions.

Private equity holding periods continue to lengthen…

For exits in 2014, the median holding period slightly increased to 5.8 years. These exits mostly represent portfolio companies that were acquired at the peak of the last bubble (2008), prior to the recession and likely at higher valuations. Looking forward, will the holding period decrease as the data begins to reflect acquisitions made during the recession or has the holding period of the private equity firms fundamentally lengthened?

More than 80% of U.S. private equity firms are located in just 10 states, with the largest concentration of firms in New York, California and Illinois.

The table below shows the top 15 states for private equity firms.

While both venture capital and private equity firms provide cash in exchange for equity positions in companies, the main distinction is the juncture in which the investment is made. With the exception of turnaround investments, private equity firms tend to invest in more established businesses with a history of positive, (and preferably reliable), cash flow whereas venture capital firms tend to invest in earlier-staged companies with a less proven market presence.

www.PrivateEquityInfo.com has launched a new data module of Public Companies.

The new public company data module allows subscribers to keyword search the business profiles of the largest 4,000 publicly traded companies on the NYSE, NASDAQ and AMEX exchanges.

The key benefit of the keyword search is the ability to quickly find those firms that present a match for a very targeted search term. Why search by SIC, NAICS or other industry codes when you can search on exactly the terms that interest you?

Bulge-bracket is a term used in corporate finance to describe the largest and often most prestigious investment banks. Although there is no strict metric for this classification, bulge-bracket investment banks typically represent clients with transaction values in excess of $50 million.

[NOTE: www.PrivateEquityInfo.com segregates investment banking firms by the enterprise value of the firms’ typical clients.]

Prior to the 2007-2008 sub prime mortgage crisis, bulge-bracket firms dominated Wall Street. However, many of the largest investment banks were highly leveraged, having borrowed sums of money that were too large relative to their cash or equity capital. This borrowing essentially leverages (amplifies) a firm’s returns (up or down), making the firms particularly vulnerable to market movements. The sub prime crisis therefore had far reaching effects and served as a cleansing of sorts for the financial markets. As the value of mortgage-backed securities in the investment banks’ leveraged portfolios declined, so did the banks’ solvency, which begs the questions: What happened to the Bulge Bracket firms and where are they now?

For each fund under management, private equity firms cycle through a multi-staged process consisting of:

• Fund raising from limited partners
• Portfolio acquisition search
• Investment
• Growth
• Divestment
• Dispersal of capital gains (or losses) back to the limited partners