Private equity M&A is at record highs as fund managers feverishly try to put committed capital to work.
More than twice as many private equity fund managers than a year ago say they’ll direct the most capital to new deals, and fewer say they will pursue add-on acquisitions.
At the same time, they are moving faster to deal close but are seeing more risk exposure uncovered during due diligence, a major challenge to getting deals done.
The competitive state of M&A is influencing strategies throughout the lifecycle. Higher deal multiples are putting pressure on returns, prompting more fund managers to deploy more strategic value creation strategies and even placing more scrutiny on paths to exit during the deal evaluation stage.
Our fall 2021 survey examines the trends that 200 middle market private equity fund managers are seeing and the tactics they are deploying throughout the deal lifecycle.
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Deal flow drivers have increased and diversified, while risk exposure uncovered during due diligence remains the top challenge to closing deals.
More than a third of fund managers are paying higher multiples to win bids, putting pressure on returns and prompting more strategic value creation strategies.
Fund managers are evolving their strategies, and nearly 60% are contemplating SPACs and IPOs.