In 2018, we looked at the historical ratio of investments-to-exits for private equity portfolio companies. Generally, the data showed a trend of private equity firms pushing down market, focusing on smaller transactions. This down market trend was thematic from 2015 – 2018, and is now well-known within the M&A industry.

Today, we repeat this study with updated data from 2017 – 2022YTD. We now see a reversal of the previous trend. That is, the ratio of the number of PE (Investments / Exits) shows private equity firms now moving up market to focus on Large and Mega deals.

The Data

All data for this study pulls from our M&A research database at www.PrivateEquityInfo.com.

Expanding on our last post, Private Equity Investing in the Automotive Aftermarket Industry, the demand for electric vehicles has surged the EV fleet size on the road. Consequently, private equity investors have shown increased interest in the emerging EV charging stations industry.

The chart below shows the trend of PE platform investments in the EV Charging Station industry.

Our partners at TruSight, LLC wrote an interesting article about the recent and substantial decline in new automotive sales. TruSight’s thesis is that this would likely create additional demand for aftermarket parts.

To pair with that, we explored our Database of Private Equity Firms to analyze the trend of private equity firms investing in Automotive Aftermarket platform acquisitions.

The chart below shows varied PE appetite for automotive aftermarket companies over the past decade.

Private equity firms have shown an increased interest in Advisory Services platforms over the past decade. Consistent with this trend, 2022 is on pace for a record year for PE firms investing in advisory services companies.

Our M&A Research Database shows 194 historical platform investments (excluding add-ons) in the Advisory Services space.

There was a time when private equity firms generally avoided acquiring portfolio companies from other private equity firms. This is no longer the case.

In fact, some PE firms operating at the lower end of the market view larger PE firms as likely exit strategies for their portfolio companies. Conversely, larger PE firms now view smaller PE investors as potential deal flow channels for new acquisitions.

The graph below shows the number of PE-to-PE deals by month, since Jan 2021.

The data table below compares monthly private equity transaction volume (investments and exits of portfolio company holdings) for the first half of 2021 and 2022.

We probed our Private Equity Database to determine the most active private equity investors in the Restaurant sector. Below are the Top 15 private equity firms investing in restaurants.

Private equity investments in the Mental Health space have increased significantly in the wake of COVID.

The chart below, from our Private Equity Database, shows varied PE appetite for mental health companies over time, but spiking in recent years.

The Consumer Price Index (CPI) for May 2022 showed 8.6% inflation over May 2021. But when we go shopping, buy groceries, and fill up the gas tank, it feels like more than the reported value… because it is.

I recently posted an analysis on the underlying CPI data on my personal blog. Someone suggested the PrivateEquityInfo.com audience would also appreciate the content and insights. Consequently, here’s a link to my CPI analysis from my personal blog…

WHY INFLATION FEELS LIKE IT’S MORE THAN REPORTED

Private equity firms have shown an increased interest in battery companies over the past decade, with the exception of 2020, an anomaly year for all investments. Consistent with this trend, 2022 is on pace for a record year for PE firms investing in battery companies.

Our M&A Research Database shows 321 historical platform investments in battery companies, including:

• 122 platform acquisitions since 2012 (see graph below)
• 24 platform acquisitions in 2021 alone.