PE Index: Private Equity Activity Rises in Q2 Due to Strong Fundraising Volume
Bailey: “Even in the current economic environment, investors have confidence that private equity firms will be able to deploy capital and deliver superior returns over the long run.”
Washington, D.C., August 2, 2012 – The Private Equity Growth Capital Council’s Private Equity Index (PE Index) rose to 99.7 in the second quarter of 2012. The computation, which measures overall private equity activity in the U.S., rose 6 percent from the previous quarter. The quarterly increase in the index’s value is driven primarily by strong fundraising activity, despite modest declines in private equity investment and exit volumes. The Q2 PE Index registered just 0.3 points lower than its ten-year moving average.
“The current trends in U.S. private equity indicate that, even in the current economic environment, investors have confidence that private equity firms will be able to deploy capital and deliver superior returns over the long run,” said Bronwyn Bailey, PEGCC Vice President of Research.
Key findings about private equity activity in the first quarter of 2012 include:
- Quarterly U.S. private equity fundraising volume increased from $20 billion in 2012-Q1 to $42 billion in 2012-Q2.
- Equity contributions registered at 37 percent, staying above the 35 percent level since 2007.
- Investment deal volume fell 8 percent to $51 billion in 2012-Q2.
- Exit volume declined 10 percent from $27 billion in 2012-Q1 to $24 billion in 2012-Q2.
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About the PEGCC Private Equity Index
Designed to provide an accurate snapshot of the state of the private equity market at any given point in time, the PE Index is a composite measure of U.S. private equity activity based on three key factors: the dollar value of total private equity-backed investment, fundraising, and exits (portfolio company IPOs or sales to corporations or other investors). The Index measures 100 when all three components are at their 10-year moving average. These three factors collectively capture the most fundamental elements of the private equity market.
The Private Equity Index is calculated using data provided by Thomson Reuters and PitchBook. The Council updates the PE Index at the end of each quarter.
About Private Equity
The private equity industry in the U.S. comprises nearly 2,600 investment firms. They operate nearly 15,300 U.S.-based businesses in all 50 states and all Congressional districts. These companies employ approximately 8.1 million people. In 2012 alone, U.S. private equity firms invested nearly $144 billion in over 1,700 U.S.-based companies. The private equity industry has distributed over $1 trillion to its limited partner investors over the past three decades.
About the Private Equity Growth Capital Council
The Private Equity Growth Capital Council (PEGCC) is an advocacy, communications and research organization and resource center established to develop, analyze and distribute information about the private equity and growth capital investment industry and its contributions to the national and global economy. Established in 2007 and formerly known as the Private Equity Council, the PEGCC is based in Washington, D.C. The members of the PEGCC are 36 of the world’s leading private equity and growth capital firms united by their commitment to growing and strengthening the businesses in which they invest. More information about the PEGCC can be found at www.pegcc.org.
