2019 Global Private Equity Outlook

24 September 2018

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Today's crowded and ever-growing private equity market means that buyout multiples continue to rise, making the deployment of capital a persistent challenge. Meanwhile, uncertainty related to global trade, repercussions from the US tax code and regulatory overhaul, and an uncertain exit environment mean firms face unprecedented pressure to find long-term value. In response, fund managers are scaling up, using more long-term capital, and exploring alternative deal types to gain a competitive advantage.

In order to understand these strategies and the evolution of the current private equity market, Dechert LLP commissioned Mergermarket to survey senior private equity executives from across the globe for their insights.

Key findings include:

  • 88% of respondents said that having a specialization or niche had become important to their firm.
  • To combat competition and higher multiples, respondents said they were very likely to make acquisitions based on industry or market differentials; create vertically integrated portfolio companies; and build a portfolio company from scratch with a hand-picked management team.
  • Club deals, including transactions with significant co-investment commitments from LPs, are becoming increasingly widespread, though challenges remain. The challenges include determining the sources of financing and finding the right consortium partners.

For additional resources related to the report from Dechert, click here.