U.S. Private Equity Deals Fall From Last Quarter but Continue Overall Rise

‘Dry powder’ increased by 5% in first quarter

Private equity deal volume fell 24% from the fourth quarter. Private equity deal volume fell 24% from the fourth quarter.

First-quarter private equity investment volume and fundraising fell from the fourth quarter but beat the first-quarter levels of the past five years, according to the Private Equity Growth Capital Council.

The council’s quarterly Trends Report also showed that exit volume declined, but still outperformed first quarter results since 2005.

“Despite the severe winter weather, private equity activity in the first quarter was a bright spot for the U.S. economy,” Bronwyn Bailey, PEGCC’s vice president of research, said in a statement.

“Private equity activity continues to experience year-over-year growth since the Great Recession, providing a source of capital to promising companies and investment returns to pension funds, charitable foundations and university endowments.”

The quarterly report’s analysis was based on data from PitchBook, Preqin and Standard & Poor’s Leveraged Commentary & Data

Following are some key factors in the new report:

  • Investment deal volume fell from $144 billion in fourth quarter 2013 to $110 billion in first quarter 2014, a fall-off of 24%
  • Total equity financing for U.S. leveraged buyouts fell from 44% to 38%
  • Fundraising volume fell from $73 billion to $33 billion, a 55% drop
  • Callable capital reserves, or “dry powder,” increased by 5%, from $391 billion to $412 billion
  • Exit volume decreased by 20%, from $61 billion to $49 billion.

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