Years ago, we reported on the trend of private equity firms moving down market, closing smaller deals and moving away from the more competitive landscape of the larger deal space.

Previous Related Posts:

• Private Equity Moving Down Market
• Growth in Private Equity Firms Over Time

To see the effects of this trend now, I grouped the private equity firms from our M&A Research Database into four categories, based on the enterprise value of their typical platform acquisitions (add-on investments excluded).

Size Categories

• Small ($0 – $50 million EV)
• Mid ($50 – $250 million EV)
• Large ($250 – $500 million EV)
• Mega ($500+ million)

Interestingly, approximately half of the private equity firms now focus on smaller deals, with an enterprise value range of $0 – $50 million.

Global PE Firms

Most middle market investment bankers I talk to are reporting record deal flow. Likewise, private equity firms, industry wide, are saying they are inundated with deal opportunities. In fact, May (2021) was likely a record month for most private equity firms, in terms of the number of inbound deal opportunities coming across their desks. Why is that?

Seven converging factors driving the abundance of M&A deals…

The trending private equity investment sectors for April 2021 were Financial Services, Food & Beverage, Home Healthcare, and Cloud Based Software. Sample transactions are highlighted below.

Our research team at PrivateEquityInfo continues to build a high quality, proprietary database of private equity firms, portfolio companies and key executives, now surpassing 100,000 portfolio companies and 55,000 senior-level private equity executives.

We understand the exacting standards within the M&A community and are absolutely fanatical about the quality of our data. It’s recent, complete, continually updated & validated for accuracy.

The single best indicator of a private equity firm’s interest in a specific sector or niche is that they have already made a similar platform investment. To find these targeted private equity firms for your deal, search our database of PE-owned portfolio companies using keywords and phrases that describe your client’s company.

Find targeted PE investors for your deal – Watch a 45 Second Tutorial

The trending private equity investment sectors for March 2021 were Software, Cybersecurity, Food & Beverage, and Health & Wellness. Sample transactions are highlighted below.

The Private Equity Info Research Database currently tracks 348 current portfolio companies in the Packaging space. These companies are collectively held by 259 private equity firms.

16 of these private equity firms hold at least 3 platform investments in packaging companies in their current portfolio.

Covid-19 forced a tectonic shift in how we work and where we work. With more people working from home, many companies took this opportunity, while already disrupted, to relocate their corporate headquarters.

A common sentiment heard on zoom calls, “The home office approach is working better than we expected. Maybe we don’t really need an office downtown.”

“Maybe we don’t need to be in this state,” was the reply.

Consequently, some firms relocated.

Anecdotal conversations around the M&A community suggest a lot of firms left New York and moved to Florida, Texas and Colorado. But what does the data show?

We compared the headquarter locations of private equity firms in our M&A Research Database in January 2000 to March 2021. The chart below shows the migrations of private equity firms over the past 15 months, by state.

Private equity investments in apparel companies has declined in recent years, although this trend is not too dissimilar from PE investment trends overall.

The graph below shows private equity platform investments in Apparel companies over the past 5 years.

The trending private equity investment sectors for February 2021 are highlighted below with a few example transactions.

Food supplement businesses are attracting attention from private equity investors. PE firms have already made six platform investments in the supplement space in 2021.

In fact, our M&A Research Database shows 180 supplement businesses currently held as portfolio companies of private equity firms.

The “supplements” category represents a diverse range of businesses. The 180 private equity owned supplements companies include: