US Private Equity Activity Rebounded to Healthy Levels in 2020 Despite COVID-19 Headwinds
SEATTLE, Jan. 12, 2021 /PRNewswire/ -- PitchBook, the premier data provider for the private and public equity markets, today released its 2020 Annual US PE Breakdown Report, which found that private equity (PE) dealmaking bounced back during the latter half of 2020 to finish the year on a high note despite a tumultuous March and April due to the COVID-19 pandemic. When traditional leveraged buyout activity for platforms effectively froze, sponsors quickly pivoted to put capital to work in add-ons, minority transactions, and into public companies. Exit activity followed a similar trajectory but fell even more during the crisis only to rebound more strongly, with exit value ending up year-over-year. As portfolio company marks tumbled, PE firms invested additional capital into their holdings and pushed out exit timeframes but a roaring public equitites market compelled PE firms to publicly list many gargantuan portfolio companies. Fundraising remained steadier than deals and exits between quarters but saw a more sizable drop year-over-year. Early pandemic-related difficulties, such as performing due diligence via videoconferencing, delayed many fundraising efforts. However, the largest and more established PE firms thrived as limited partners (LPs) reupped with existing relationships.
To download the full report and underlying data, click here.
"2020 was a rollercoaster of a year across the board but the private equity ecosystem proved resilient. Heading into 2021, dealmaking appears poised to continue its blistering pace seen during the back half of 2020 before normalizing in the later parts 2021," said Wylie Fernyhough, senior analyst and PE team lead at PitchBook. "US PE firms are sitting on more than half a trillion dollars in dry powder and are antsy to put this capital to work as the American economy continues to recover. Buyouts in technology and healthcare will likely remain popular as will growth equity investments."
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PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company's data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York and London and serves more than 45,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.
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