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Private Equity Exit Volume Hits Record Level in 2014

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The U.S. private equity industry recorded its highest exit volume ever last year, according to the Private Equity Growth Capital Council.

PEGCC recently released its trends report for the fourth quarter of 2014. According to the report, annual U.S. private equity exit volume increased 35% year over year from $191 billion in 2013 to $257 billion in 2014 — pushing the 2014 exit volume to the “highest level ever.”

Bronwyn Bailey, vice president of research at the PEGCC, notes, in a statement, that the exit trends meant strong returns for investors. “Exit volume in 2014 translated into tangible benefits for investors, namely, record distributions from private equity funds,” Bailey said. “If public indices remain high, I expect continued robust exit volume in the upcoming year.”

U.S. private equity investment volume also closed the year on a high note, at the highest level since 2007.

According to PEGCC, annual U.S. private equity investment volume increased from $501 billion in 2013 to $523 billion in 2014 — up 4% year over year.

Private equity activity strengthened overall in 2014 — despite a decline in U.S. fundraising, both callable capital reserves and leveraged buyouts increased.

Callable capital reserves, also called “dry powder,” of global buyout funds increased significantly to $467 billion in December 2014 from $399 billion a year earlier, according to the report.

Total equity financing for leveraged buyouts increased from 37% at the end of 2013 to 39% for 2014.

Meanwhile, the annual U.S. private equity fundraising volume fell 2%, from $181 billion in 2013 to $178 billion in 2014. Although the overall private equity fundraising dipped slightly from 2013, the fourth quarter of 2014 saw a significant increase in fundraising over the third quarter of 2014, increasing to $58 billion from $32 billion.

Steve Judge, president and CEO of the PEGCC, noted that all these key metrics performance puts the private equity industry in “strong standing.”

“The private equity industry invested a record amount of capital into American companies last year,” said Judge, in a statement. “Fund managers continue to find new investment opportunities and provide the necessary capital to help businesses expand and innovate.”

Released each quarter, the PEGCC’s Trends Report is designed to provide a snapshot of the private equity market

The quarterly Private Equity Trends Report analyzes key factors that affect U.S. private equity investing.  The Private Equity Trends Report provides analysis based on data from PitchBook, Preqin and Standard & Poor’s Leveraged Commentary & Data.

— Check out Private Equity, Venture Capital Firms See Intense Competition in 2015 on ThinkAdvisor.

 

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