Prospects for private equity investment activity in 2013 look better than they have since the global financial crisis. But a major breakout in PE deal making hinges on a comeback of the public-to-private deals that dominated PE’s last cyclical peak and have been so notably absent since then. Between 2004 and 2007, public-to-private buyouts accounted for 90% of the increase in total buyout deal value. Since 2007, the end of “take private” deals contributed to 83% of the drop in deal value (see Figure). Bain & Company’s Global Private Equity Report 2013 describes how recent industry and market changes are making public-to-private deals harder to pull off today. Because PE fund sizes are smaller than they were in the boom years, fewer funds have the wherewithal to absorb a mega deal on their own. PE dealmakers will need to join forces with other funds or seek partnerships with large LPs to do big deals. Rising public equity markets make it more difficult for PE funds to identify good companies they can buy at a low enough price to make the math work. …read more
Source: FULL ARTICLE at Forbes Latest