The private equity industry is shaping up to be a remarkable year for deal-making in the United States, and data from Q1 and Q2 points that these figures will continue to sustain through the end of the year and beyond.
According to PitchBook, private equity deals in the U.S. through Q3 have broken 2019’s annual record deal value, coming in at over 6,000 deals closed for $787.6 billion, taking advantage of rising share prices and remaining unwavering despite the current climate and the possibility of inflation and increase in interest rates.
In addition to breaking record deal values, private equity exits are on a remarkable run, with a year-to-date exit value at $638 billion— more than 50% higher than the next highest-annual figure. Public-private multiple spread has incentivized PE firms to publicly list portfolio companies at a rate that hasn’t been seen in years.
Lastly, fundraising has proved to continually bring in capital at a rapid pace. In the first three quarters of 2021, firms have successfully closed 295 funds and raised $237.7 billion.
Low interest rates and an abundance of capital under management have enabled the private equity industry to reach new highs. These characteristics, along with a possible increase in capital gains, have pushed sellers to wrap transactions before the end of the year and drive buyers to deploy as much capital as possible.
The overall PE environment through Q3 has proved to be nothing short of exceptional. Considering what is pending upon the horizon— inflation and the possibility of interest rate hikes next year— dealmakers are steadfast, buying activity is in a frenzy, and valuations are high. If you are looking to take advantage of the current market, reach out to us at Aberdeen Advisors to learn how we can help.