May 10, 2013

PE Index: Private Equity Activity Slows in Q1 2013

Bailey: “Uncertainty surrounding changes in U.S. fiscal policy in 2013 heightened the pace of private equity deal making on the buy and sell side at the end of 2012.”

Washington, D.C. – The frenzied private equity activity during the fourth quarter of 2012 receded in first quarter of 2013. The Private Equity Growth Capital Council’s Private Equity Index (PE Index), which measures overall private equity activity in the U.S., decreased 42 percent from its fourth quarter level to 75.0 during the first quarter of 2013. Private equity fundraising and exit volumes continue to trend upward when evaluated on an annual basis.

“Uncertainty surrounding changes in U.S. fiscal policy in 2013 heightened the pace of private equity deal making on the buy and sell side at the end of 2012,” said Bronwyn Bailey, PEGCC Vice President of Research. “This amplified activity normalized in the first quarter of 2013, and it is likely that some first quarter activity was accelerated into the fourth quarter of last year. When examined on an annual basis, private equity activity remains on track.”

Key findings about the private equity activity in the first quarter of 2013 include:

– Quarterly U.S. private equity investment deal volume fell from $126 billion in the fourth quarter of 2012 to $52 billion in the first quarter of 2013.
– Fundraising volume decreased from $33 billion in the fourth quarter to $16 billion in the first quarter.
– Exit volume decreased from $62 billion in the fourth quarter to $16 billion in the first quarter.

The full report can be found here.

About the PEGCC Private Equity Index
Designed to provide a snapshot of the state of the private equity market at any given point in time, the PE Index is a composite measure of U.S. private equity activity based on three key factors: the dollar value of total private equity-backed investment, fundraising, and exits (portfolio company IPOs or sales to corporations or other investors). The Index measures 100 when all three components are at their 10-year moving average. These three factors collectively capture the most fundamental elements of the private equity market.

The Private Equity Index is calculated using data provided by Thomson Reuters and PitchBook. The Council updates the PE Index at the end of each quarter.