There are more private equity firms with more capital deployed (and waiting to be deployed) than ever before. Consequently, finding good target companies to acquire has become increasingly competitive.

To enter a less competitive deal space, many private equity firms have moved down market, showing an increased interest in middle market and lower mid-market companies. The rationale is that there would be fewer buy-side financial sponsors competing for the same deals because there is a larger pool of target companies (there are more mid-market companies than larger companies) and because traditionally, PE firms have been less focused on the lower end of the market.

This rationale may no longer hold. The Private Equity Info M&A research database now shows a substantial interest from financial sponsors across nearly all segments of the market – large and small. The database contains:

Recently, I’ve noticed an increased interest from private equity firms investing in Online Education companies.

Recent Private Equity Investments in Online Education Companies

Recently, I’ve noticed an increase in private equity firms investing in Online Digital Health companies.

This space has traditionally been more reserved for the venture capital funds. Either the online medical software industry has sufficiently matured to attract the attention of traditional private equity firms or the PE firms are moving to a slightly earlier stage investment strategy… or both.

Recent Private Equity Investments in Online Digital Health Companies

This video provides some macro context to some of our recent private equity industry studies.

Private equity firms currently hold 108 positions in publicly-traded consumer services companies. The breakdown is shown below.

Private equity firms currently hold 221 positions in publicly-traded healthcare companies. The majority of these are pharmaceutical companies, followed by biotechnology companies.

Private equity firms currently hold ~700 positions in publicly-traded companies. Nearly three-fourths of these positions are in the healthcare, consumer services, technology, finance and energy sectors. Private equity investments in healthcare companies is the largest sector focus (32% of investments).

Update: Read our follow-on study showing Private Equity Investments in Public Healthcare Companies

In tracking portfolio company acquisitions by private equity firms, we also get a view of which law firms are most active in PE deals. Although not necessarily in order, these are the main law firms we see advising private equity transactions in the second half of 2017:

A year ago, I created a portfolio of 655 publicly-traded stocks based on private equity ownership in each company. I called it the “PE-basket”.

When I checked the performance of this PE-basket at the 6-month mark, it was lagging the performance of the general market. However, now that a full year has passed, the PE-basket has in fact out-performed the broad market as well as the other benchmarks I selected.

Investments in food companies, as a share of the overall private equity investment pie, has moved up and down a bit over time, but tends to hover around 4% of PE deals.