•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Laxman Pai, Opalesque Asia:

Private equity firms closed a total of $592 billion in deal value in 2020, up 8% from 2019 and 7% higher than the five-year average of $555 billion, said the latest global private equity report by Bain & Co.

According to the report, the number of deals was down 24% in 2020 from a year earlier, it said.

"Covid did have a pronounced negative impact on the global deal count, as the number of buyouts fell 24% to around 3,100 in 2020, from 4,100 in 2019. Except for the technology and telecom sectors, the number of deals slumped across the business landscape compared with the five-year average," the report said.

The retail, consumer, and media, and entertainment sectors were among those taking the biggest hits.

This drop in deal numbers was dramatic, but it is likely to be temporary. Due diligence activity around the world was as strong as it's ever been in early 2021, suggesting that many of the deals postponed amid the pandemic chaos will eventually get done. That should provide a structural scaffold under 2021 activity.

The reason total deal value rose in 2020 while volume slipped was a 24% increase in average deal size to $776 million. That reflects the ongoing concentration of the PE industry?€?bigger funds have to do bigger deals to move the needle for investors.

Banks also made more financing available for large deals than for smaller ones. In a jittery market, they were most comfortable lending to well-established GPs......................

To view our full article Click here