PE Fundraisers Going Bigger in 2016 Portends Emerging Spread in Success?

At $225 million, the median US private equity fund size is higher thus far in 2016 than in the several years prior. This is despite relatively healthy fundraising activity in general, with 57 closed vehicles in the third quarter alone; one may suppose that diminished activity could artificially inflate median fund sizes, as the most successful firms are still able to close while others miss out, but that is not the case this year. The increase in size is attributable to a confluence of factors...

Debt Usage in US M&A Remains Historically Low

Even as multiples remain stubbornly high across multiple sectors, debt usage remains low. This is primarily the result of a confluence of factors, including stricter regulations, cash-rich buyers and a general trend toward buying and building as a strategy on the part of private equity investors. In that last case, PE firms aren’t relying as much on financial engineering as they used to, looking instead to deploying more equity in deals to avoid overburdening portfolio companies with barely serviceable debt loads. Of course, that necessitates shrewd operational enhancements...