Where Did the Private Equity Money Flow in 2012?

The Private Equity Growth Capital Council (PEGCC) recently released its estimate of private equity flow by top 20 states and congressional districts during 2012.  Where did the money flow?

According to the PEGCC report, which covers over two thousand private equity investments, 2,800 U.S. based private equity firms, and $347 billion in capital flow, the most money flowed to Texas with $46.6 billion.  Coming in second was California at $35 billion and Colorado at $26.8 billion.  Interestingly, private equity investments are clustered, with the investment flows to Texas, California, and Colorado accounting for almost a third of all private equity flow.  Here’s the entire top 20 list by state.

Interestingly, with the exclusion of the two most populous states – California and Texas – the private equity cash inflow isn’t centered on the largest states.  For instance, smaller states like Colorado, Utah, and New Mexico showed up in the top 20 although they represent a much smaller portion of the total U.S. population.

The PEGCC report is also provides a breakdown by congressional district.  Investment flow to Colorado’s 6th Congressional District (Mike Coffman, R) saw the largest flow in private equity funding at $17.2 billion, followed by Texas’ 18th District (Sheila Lee, D) at $15.6 billion, Illinois’ 7th District (Danny Davis, D) at $6.5 billion, New Jersey’s 11th District (Rodney Frelinghuysen, D) at $5.9 billion, and Texas’ 24th District (Kenny Marchant, R) at $5.5 billion.  Perhaps unsurprisingly, as with investment flows according to state, private equity flows are clustered, with, for instance, congressional districts within Texas receiving 5 of the 20 top 20 cash inflow receiving districts.  Here’s the entire top 20 list by congressional district.

As a final categorization, the PEGCC report breaks down the Pitchbook data by industry. According to the report, Consumer businesses, such as retail stores and consumer goods, received the largest inflow of private equity funding at 19 percent.  Consumer-focused businesses were followed by Information Technology at 18 percent, Financial Services at 18 percent, Energy at 17 percent, and Business Services at 16 percent.  The bottom two categorized industries were Healthcare at 9 percent and Materials and Resources at 3 percent.

Overall, private equity conditions generally improved from 2011 to 2012, and appear to be on a continued path of moderate growth from 2012 to 2013.  Although private equity flow continues to grow, the growth is not even, with over 30 percent of 2012 private equity deal flow ending up in Texas, California, and Colorado.  In terms of industry favorability, Consumer-focused businesses saw largest private equity cash inflow at 19 percent of total dollar volume, followed by Information Technology and Financial Services at 18 percent each.