Private Equity Activity Picks Up in Q4

In the fourth quarter of 2013, overall private equity activity increased. Investment and exit volumes continued their steady upwards climb, which began at the start of the year. Fundraising volume experienced a sharp change in trend direction, increasing by almost 120% from the previous quarter. Some key metrics of the private equity industry in the fourth quarter of 2013 are:

U.S. PE INVESTMENT VOLUME INCREASES

Current Level

Quarterly Change %

Quarterly U.S. private equity investment volume rose from $114 billion in Q3-2013 to $131 billion in Q4-2013. P

$131 B

+14%

EQUITY CONTRIBUTIONS INCREASE

Total equity financing for U.S. leveraged buyouts during the quarter increased to 44%.

44%

+38%

U.S. FUNDRAISING LEVELS RISE

Quarterly U.S. private equity fundraising volume rose from $18 billion in Q3-2013 to $40 billion in Q4-2013. P

$40 B

+118%

DRY POWDER INCREASES

Callable capital reserves (dry powder) of global bu yout funds rose from $384 billion in September 2013 to $391 billion in December 2013.

$391 B

+2%

EXIT VOLUME RISE

Quarterly U.S. private equity exit volume increased from $43 billion in Q3-2013 to $62 billion in Q4-2013.

$62 B

+44%

Note: Figures in this report are rounded. Percentage change calculations are based on actual figures and then rounded.

Fig 1 Investment and fundraising volumes hold steady, while exit volume follows a downward trend.

Source: PEGCC

Fig 2 U.S. private equity investment volume increased by 14% from the previous quarter.

Source: PitchBook

Fig 3 The proportion of equity financing for U.S. leveraged buyouts increased to 44%.

Source: Standard and Poors Capital IQ Leveraged Commentary & Data

Fig 4 Capital raised by U.S. private equity funds rose from the previous quarter to $40 billion.

Source: PitchBook

Fig 5 Global callable capital reserves (dry powder) of buyout funds increased to $391 billion as of December 2013.

Source: Preqin

Fig 6 U.S. private equity exit volume grew from the previous quarter to $62 billion.

Source: PitchBook

Appendix: Figure 1
The chart uses three key metrics to provide a summary of overall private equity market trends in the United States:

Fundraising volume net capital commitments secured during the quarter by private equity funds, including buyout, growth capital, infrastructure and energy funds. Investment volume total reported dollar volume of private equity-backed investment completed during the quarter. Exit volume total reported exit dollar volume during the quarter, including public offerings and sales to strategic and financial investors.

The value of each factors metric for the quarter is the four -quarter rolling average indexed to 2004 levels. When the factors metric is at its four-quarter rolling average as of the end of 2004, its value equals 100.