PEGCC Top Ten Private Equity Trends for 2016, Powered by EY
Report Covers Investments, Regulation, GP/LP Relations, and Portfolio Companies
WASHINGTON – The Private Equity Growth Capital Council (PEGCC) released their Top 10 Private Equity Trends for…
Report Covers Investments, Regulation, GP/LP Relations, and Portfolio Companies
WASHINGTON – The Private Equity Growth Capital Council (PEGCC) released their Top 10 Private Equity Trends for 2016, forecasting private equity investment, regulatory implications, GP/LP relations, and portfolio company operations. The PEGCC’s forecast is based on a study conducted by EY in late 2015.
“The research conducted by EY shows an interplay of factors, including the current high-valuation landscape, the effects of an increased regulatory environment, and the divergence of investment strategies in the private equity industry,” said Bronwyn Bailey, PEGCC Vice President of Research. “Our team worked to distill this information into analysis that we believe will track with the private equity activities over the next year.”
“These are the key trends that will shape the dynamics impacting private equity investment in 2016,” said James Maloney, PEGCC Vice President of Public Affairs. “We polled top executives at both larger firms and smaller firms about their expectations, and these insights gave us a strong sense of where the industry is heading.”
The report was composed from a survey of 26 unique private equity firms. Read the full report here. Below are the top ten trends.
- Investments will remain challenging, as firms seek opportunities in a high-valuation landscape.
- Although valuations will remain high, they will stabilize or dip slightly.
- Equity contributions will likely increase.
- Investment strategies of larger and smaller firms will continue to diverge.
- Regulatory guidance may continue to restrict some firms’ ability to finance deals.
- Firms have adjusted to the new regulatory regime and will be better positioned to manage compliance issues.
- GP/LP relationships will be bolstered by an increase in co-investments.
- Smaller firms will face more competition for limited partners’ dollars.
- Exit volume will plateau, with the number of IPOs falling significantly.
- Private equity-backed companies will experience job growth and wage growth.
About the Top 10 Private Equity Trends for 2016
Conducted from October 2015 to December 2015, this report surveyed private equity decision makers, asking questions related to investment, financing, and fundraising in the private equity industry. More than $276 billion assets under management are represented by the 26 unique firms responding to the survey. All survey results in this report were prepared by EY.
About the Private Equity Growth Capital Council
The Private Equity Growth Capital Council (PEGCC) is an advocacy, communications, member services, 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. The members of the PEGCC consist 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
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