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March 17, 2022 No Comments Author: Andy Jones

Private Equity Investments in Construction Companies

Traditionally, Construction has not been a preferred industry of interest for private equity firms, precisely because it is often capital intensive and cyclical.

However, the Private Equity Info Research Database currently tracks 393 unique portfolio companies in the Construction space, collectively owned by 321 unique private equity firms. Clearly, there is now PE appetite in the construction space.

Top PE Firms Investing in the Construction Industry

The following PE firms hold at least 3 current platform investments in construction companies.

January 17, 2022 No Comments Author: Andy Jones

Private Equity Portfolio Aging

Portfolio company aging stats are dictated by past acquisition activity and exit rates over time.

As portfolio companies grow older in their respective funds, they age out, via an exit, often within 3 – 7 years. Portfolio companies in the 5 – 7 year vintage signal potential near-term transactions – deal flow – the lifeblood of investment banks, private equity firms, accountants, law firms, and a host of M&A service providers.

For U.S. portfolio companies owned by U.S.-based private equity firms, there are currently:

  • 1,225 portfolio companies currently aged (5 – 5.9 years)
  • 997 portfolio companies currently aged (6 – 6.9 years)
  • 776 portfolio companies currently aged (7 – 7.9 years)

As we previously reported, the median holding period for private equity portfolio companies industry wide is currently 4.9 years. Consequently, let’s look into the 5-year aging mark in more detail.

Turning Five

If we stand on the 5-year mark and look upstream at the parade of portfolio companies approaching their five-year anniversary in their respective funds, we’ll see the monthly aging flow shown in the graph below.