Q1 Private Equity: Calm Before the Storm or Indications of a Slowdown?

April 12, 2013 15:49 by Clayton Reeves in M&A  //  Tags:   //   Comments (0)

After an the exclamation point to 2012 that was the fourth quarter, there is sometimes a need to take in a deep breath; that is exactly what happened in private equity ("PE") markets during February and March of Q1 2013.  After momentum from the end of 2012 carried through January, a huge drop off in deal volume and transaction total occurred in February and March.  With only $52 billion spread across 355 deals in the U.S., Q1 represented the lowest quarterly numbers since 2009.  Exit activity in Q1 was even more sluggish than deal-making, as volume and capital exited spiraled down 67% and 81%.

 

 

Is this a cause for alarm?  Right now, the panic button should remain untouched.  With how good Q4 was, a dropoff was expected; as you can see from the chart below, Dec and Jan were incredibly busy months for PE.  Furthermore, their remains substantial expiring dry powder, cheap availability of debt and a willingness to do deals that could help regain momentum through the end of the year.

 

 

To see the entire report, visit Pitchbook.com here.

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