Recently, private equity (PE) data provider Pitchbook provided their take on the state of PE deal activity in the U.S. Amazingly, PE deal activity far surpassed $1 trillion in 2021. Here’s a look at the current state of the U.S. PE deal activity picture.
The Broad Picture of PE Deal Activity
Shown in the following graphic is Pitchbook’s accounting of PE deal activity in the U.S. from 2011 through 2021.
PE deal activity has grown from $339 billion in 2011 to over $1.2 trillion in 2021 (blue bars). That’s right – $1.2 trillion. The 2021 figure, capturing the entire 2021 year, represents an almost doubling of deal activity compared to 2020. Prior to the 2021 $1.2 trillion estimate, the highest on record was $755 billion in 2019.
The number of deals (represented by the yellow line and black dot) has grown from 3,089 to 8,624. Less astonishing, but still large by most any growth measure. The most amazing visual is the explosion in the number of deals from 2020 to 2021, going from 5,709 to 8,624. Judged solely by this picture, it truly is an amazing time to be involved in private equity.
Sector Detail
The broad picture begs the question of how each sector is doing. Here’s that look.
Healthcare
The first view below is the healthcare market, a sector that has received considerable attention in the past couple of years known as the pandemic years. Deal value for the healthcare sector has gone from $25 billion in 2011 to $78 billion in 2021. The number of deals has grown from 238 in 2011 to 733 in 2021.
Software
The next view is of the software sector. This view presents an even stronger view than the healthcare picture. Deal value for the software sector has grown from $24 billion in 2011 (about the same as healthcare in 2011) to a high of $168 billion in 2021, more than double the deal value of the healthcare space. On the number of deals: deal activity has gone from 202 in 2011 to 947 in 2021. Nothing short of amazing.
One Last View – Megadeals
In PE deal activity, there are multiple ways to slice the data. Here’s one last view for today. It is of PE megadeal activity trends in recent years. Megadeal deal values have gone from $93 billion in 2011 to $335 billion in 201. On the number of deals, the number of deals has gone from 34 in 2011 to 107 in 2021. Simply strong.
Summing Up
The PE world in the U.S. is doing quite well, much better than virtually any analyst would have predicted going into 2021. With this background heading into 2022, it is anyone’s guess whether PE can keep up the heat.
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