PE’s Other Overhang For several years now, the increase in the inventory of companies backed by private equity in North America and Europe has essentially plateaued. In stark contrast to the steady ramp-up in inventory during the buyout boom era, this trend can be ascribed to a few key drivers, including the healthy exit… Login
Last summer saw investors turn to shorting bond ETFs as the bond market kicked back to into life amid the Greek crisis. Volatility has continued in earnest in 2016 as the Markit iTraxx Europe index, which tracks CDS spreads across investment grade issuers, hit a three year high of 121 bps earlier this month. The…
How much longer will the M&A boom sustain PE exits? The M&A boom has been very kind to private equity sellers. Last year saw PE sellers close over 1,200 sales to strategic buyers, with total value just eclipsing $360 billion. That leaves the past three years at a total of $963 billion in total value…
Despite significant market volatility, PE shops are moving full speed ahead on select mega deals in 2016. While the dataset is still limited, the average purchase price for large corporate buyout deals so far in 2016 has skyrocketed to US$5.8bn, up from just US$1.8bn in 2015 and surpassing the US$5.1bn record set in 2007…. Login
The shrinking of balance sheets has become a common theme in recent years, particularly in the financial sector. Investors are punishing banks that either unwilling or unable to implement a more conservative financial strategy. It is increasingly clear that the same phenomenon is now observed in the commodities sector. Mining firms need to scale back their…
Discounts on first-lien institutional term loans haven’t been this wide since 2011. The average original issue discount (OID) is 98.02 so far this quarter, almost on par with 4Q15’s 97.98 average. Only 13% of first-lien institutional term loans have been done at an OID of 99.5 or narrower this quarter, slightly down from 16% last…
2015 Sees U.S. PE Fundraisers Slow Down U.S. private equity fund managers have had a fair measure of success lately. Last year, the median time it took a fund to close was 12.8 months, one of the shorter times on record, while over 87% of funds raised hit their target, for the second year in…
European credit markets, led by the banking sector, have seen risk escalate over the past several weeks with the Markit iTraxx Europe Main index seeing it’s spread widen to June 2013 highs. One relative bright spot however, has been the region’s sovereign credit, which has largely steered clear of the contagion developed in the corporate…
Despite hopes that 2016 would start off on stronger footing than 2015 closed, market volatility intensified in January. The Merrill Lynch HY Cash Pay Bond Index continued to demonstrate substantial downward pressure driven by macro volatility rooted in global growth prospects. Average bids hovered south of 86.5 by the end of last month, down from 89.16…
28% of U.S. PE Capital Overhang Predates 2013 Vintages Over a quarter of U.S. private equity dry powder is locked up in vintages from 2012 or earlier. That represents about $147 billion total that PE firms have on hand that now exceeds, give or take, three or more years in age—all these figures are sourced…