Buyout deals backed by private equity funds in the first quarter reached their highest value, $97 billion, since the $125 billion worth of buyouts in the third quarter of 2007, according to alternatives data provider Preqin.
At the same time, private equity fundraising during the year’s opening quarter slowed. Only 151 funds closed, the lowest number of closures in more than a decade, Preqin reported.
Add-ons Surpass Leveraged Buyouts
Despite the active first quarter, led by the merger in March of Kraft Foods Group and H.J. Heinz Co., buyout managers around the world still had some $456 billion in unspent capital commitments, compared with $431 billion one year earlier, Preqin said.
In the first quarter, there were 770 private-equity-backed buyout deals globally, valued at a total of $97 billion — a 20% drop in number but a 14% rise in aggregate value from the previous year.
North America experienced an 86% rise in aggregate value since the fourth quarter of 2014, to $69 billion, with the number of deals in the region falling 18% from 545 in Q4 to 449 this quarter.
A similar fall in number of deals took place in Europe, a drop of 19% to 233, but there was a more significant 43% fall in aggregate value of deals to $17 billion in Q1.
Thanks to the Kraft–Heinz merger, add-ons, including mergers, were the main investment type by aggregate value, accounting for 53% of the first quarter’s global total.