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Mega-funds push private equity fundraising to $301bn in 2019, up 52%

Friday, January 24, 2020

Laxman Pai, Opalesque Asia:

2019 saw record private equity fundraising with mega PEs and tech-focused PEs attracting the lion's share of capital, said a study.

Mega-funds dominated the PE space in 2019, pushing up fundraising to $301 billion for a 52% gain compared with 2018, said PWC in its quarterly insights. Technology-focused PE attracted almost 25% of the total fundraising.

Deal activity was resilient but below the level of 2018 largely because of policy uncertainty and fears of a downturn, it said. Disclosed deal value fell 7.2% to $677.9 billion compared with 2018. Deal volume declined 4% to 5,133.

The number of exits slumped to 1,035-the lowest level since the total of 920 in 2011-because of elevated multiples and the weakest IPO market since 2012.

The secondary market (PE to PE) has become the most popular exit strategy, representing 40% of PE exits, thanks to the high level of available capital.

"Holding periods have lengthened and we expect that trend to continue," the study said.

Technology and health care sectors dominate PE sub-sector

Deal activity among PE firms was robust during the fourth quarter, with 1,277 transactions. Deals with disclosed value reached $179.6 billion.

The technology and health care sectors are at the forefront of dealmaking. The share of PE deals focused on technology rose from less than 10% five years ago to more than 17% in 2019.

The two sectors would likely hold up comparativel......................

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