Data centric companies have become one of the most favored sectors for private equity investors in recent years. This trend started gaining momentum in 2011. Although private equity began exploring data analytics companies as an investment thesis in 2007 and 2008, the recession of 2009 – 2010 halted most PE investments across all sectors during this time.

The increased focus on data analytics companies is largely fueled by the adoption of predictive analytics (initially), and subsequently by machine learning and the rise in artificial intelligence. These applications require data (preferably good data) as the atomic input unit from which to learn. Input data informs machine learning much the same way our five senses input data into our brain, from which we derive patterns and develop predictive skills.

Data-as-a-product resonates with private equity investment preferences precisely because it is scalable, potentially quite profitable and not capital intensive (relative to scalability).

Private equity firms have made a number of investments in companies offering physical therapy services, including: general rehabilitation services, occupational therapy, sports injury recovery, orthopedic rehabilitation and pediatric therapy. Our Private Equity Database currently tracks 43 U.S. based physical therapy companies held by private equity firms.

The security industry overall has attracted significant attention from private equity investors in recent years. Private equity investments into security-related companies ranges from cybersecurity, home security, national security, private security, to security screening of goods crossing borders.

Our private equity database currently tracks 719 current platform portfolio companies with some element of security to their product or service offering. 73 of these investments were made in the last 12 months alone.

Gluten-free food has been a significant trend for the past decade, especially the last few years. Consequently, select private equity firms have made investments in companies that offer an assortment of gluten-free food.

Our research database shows 52 investments in gluten-free brands (collectively held by 42 unique private equity firms). Of these, 36 are current holdings, 16 prior investments. 2017 had the most investments of any year thus far with 9 gluten-free portfolio investments. By comparison, there were 6 in 2018 and 3 in 2019.

Headlines about private equity investments tend to focus more on the glamorous deals and faster-paced industries, particularly technology. Because of this, one might erroneously conclude private equity has curtailed investments in manufacturing companies. While it is true that manufacturing now represents a lower percentage of all private equity acquisitions compared to historical standards, PE firms still actively invest in the manufacturing sector.

In the last 60 days, our M&A Research Database has recorded 52 new private equity platform investments in manufacturing companies (there are even more add-on acquisitions in this space), of which pharmaceutical manufacturing was the most represented manufacturing category:

• Pharmaceutical manufacturing (5 investments)
• Automotive-related manufacturing (4 investments)
• Contract manufacturers (4 investments)
• Aerospace manufacturing (2 investments)
• Lighting manufacturers (2 investments)

Charles Schwab recently announced plans to acquire Ameritrade for $26 billion. The combined entity will have 24 million customer accounts holding ~$5 trillion assets.

While most people are familiar with Charles Schwab and Ameritrade for their enormous retail brokerage businesses, most do not know these firms also offer prime brokerage and custodial services to institutional investment funds.

Our research database tracks 53,711 institutional investment funds (hedge funds, private equity funds, venture capital funds, real estate funds, etc.). These funds often use third-party providers as prime brokers and custodians.

This data study reports on the prime brokerage and custodial services offered by Schwab and Ameritrade.

The top 25 private equity firms collectively hold $1.8 trillion in assets under management (AuM). The table below show the firms, ranked by AuM.

As a generational segment, Baby Boomers (now 55 – 75 years old), have a significant impact on the demographics of the U.S. population and on the markets that serve them.

As this population segment ages, there is an expected increased demand for elderly care and related services. According to Morningstar, the average age of admittance into a nursing home is 79. With the oldest baby boomers currently at 75 years, coupled with a ~5-year median holding period for private equity portfolio companies, I thought we should see an increased investment appetite for elderly care operators and related service providers from private equity firms. As it turns out, we do.

In advance of the Energy Game Change Conference, which includes a Women in Alternatives networking event, we reviewed all senior-level deal team members employed by U.S.-based private equity firms to understand female leadership representation across all the firms compared to those that specifically invest in energy-related companies.

In advance of the Rice Energy Finance Summit, I explored private equity investment trends in the energy sector using data from our M&A research database. The chart below compares PE investments in oil & gas versus renewable energy, as a percentage of total PE platform investments (add-on investments excluded).