PE Deal Forecast for 2012: Gradual Clearing

by Ken Urish 7. February 2012 10:27
The research firm PitchBook recently completed a national survey to develop a 2012 forecast for the Private Equity Industry. More than 100 senior executives at PE firms ranging to $72 billion in assets responded. The main takeaway according to the survey? Don't expect big increases in deal flow from the modest 2011 levels. A majority of private equity fund managers (70 percent) - regardless of fund size - expect to close only two or three deals during the next 12 months. This is a an increase from 2011, when 47 % of fund managers reported closing no new deals, and another 19% closed only one. While portfolios are in the black, individual companies continue to struggle - 22 percent of respondents indicated that more than 20 percent of their portfolio companies are currently performing below forecasts. But the trends are positive. The portfolio companies are rebounding, as funds continue to mitigate loses and bankruptcies decline.  While 11% of respondents reported declaring bankruptcy for one or more portfolio companies during the trailing 12 months, only three percent expect to do so in the coming year. And significantly, most respondents remain committed to their primary investment strategies. Only 7% have asked to change investment strategies and 11% are expected to do so within the next 12 months. The PitchBook survey was performed for BDO's Private Equity practice. For more details, please see this press release.  
Categories: Advisory