Taking Stock of Where We’re at with Private Equity

August 16, 2022

Every half year, we take stock of where private equity is standing. What follows is based on private equity data provider Pitchbook’s most recent accounting of where private equity stands through the first half of 2022.

Will Mega-Funds Raise $250 Billion in 2022

One of the more interesting predictions heading into 2022 was the amount of money mega-funds would raise. Data watcher Pitchbook pegged the figure at $250 billion in 2022, including predicting the three largest-ever buyout funds. How are things so far though the first half of 2022? Not too bad. As of the of the first half of the year, total mega-funds had raised about $103 billion for seven funds. For the entire 2021 year, total mega-funds raked in about $150 million across 14 mega-funds. Overall, 2022 is off to a reasonably healthy start to the year.

Source: Pitchbook

Will the Big Five Surpass $3 Trillion in 2022?

A second eye-brow raising prediction from Pitchbook was that the big five U.S. public alternatives managers’ assets under management (AUM) would surpass $3 trillion in 2022. Well, as of the end of the first half of the year, the big fives’ AUM is getting closer to that $3 trillion watermark. As of the end of the first half of the year, total AUM for these five summed to almost $2.6 trillion. The numbers are getting there, although not quite at the $3 trillion mark.

Source: Pitchbook

What About GP Stakes Deals?

A third very interesting prediction was General Partners (GP) deal activity. Pitchbook predicted that at least 30 GP stakes deals would close in 2022, and thereby set an all-time record. Through the first half of the year, there’s still lots of work to do to reach this prediction. As of the end of the first half of the year, only 8 deals had been counted under this classification on total deal value of $1.0 billion. That leaves a lot of work to do to reach the 30 deal goal. Unless we see a very large turnaround in activity, this prediction likely won’t be reached in 2022. Too bad!

Source: Pitchbook

How Many Middle-Market Software Deals Will Be Made?

The fourth prediction out of Pitchbook was that PE firms would close a whopping 400 middle-market software deals. As of writing, the number of deals is a ways away from this 400 threshold. As of the end of the first half of the year, total deal activity had reached $16 billion over 116 middle-market software deals. Overall, unless activity goes on a massive rise, it’s unlikely that PE firms will reach the 400 deal threshold in 2022.

Source: Pitchbook

Summing Up

Overall, considering the broader economic conditions around the world, private equity activity is holding on quite well through the first half of 2022.

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