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Private Equity Transaction Snapshot: Fewer Deals and High Valuations Persist


9/3/15

August marks the second month in a row where the amount of capital invested ($9.2 billion) just exceeded the amount of capital exited ($9.1 billion). Before jumping to the conclusion that the PE investment is back, it is worth noting that the deal count in August 2015 when compared to August 2014 decreased by 27% while the amount of capital invested grew by 31% — proof that fewer deals and higher valuations continue to persist. We continue to see challenges in the PE investment market with sky high valuations and aggressive strategic buyers making it difficult for PE firms to put money to work and close deals. We continue to observe that private equity firms that focus on specific industry verticals and differentiate themselves as the “buyers of choice” are best positioned to benefit from today’s market conditions as they provide substantially more to an investee than just dollars. The increased volatility in the global markets may impact global transaction activity and the risk associated with such transactions, and may likely become of greater concern when considering cross-border investments. Together, we’ll watch how the level of transaction activity reacts when market volatility is added as a component to the continuing sellers’ market. 
 
For more information, please contact Jeremy Swan, a CohnReznick principal and National Director of the Firm’s Private Equity and Venture Capital Industry Practice, at jeremy.swan@cohnreznick.com or 646-625-5716.
 

We Value Your Feedback: We are eager to hear your feedback on this snapshot and what you would like to see in future editions. Email us with your comments and suggestions at cohnreznick@cohnreznick.com.


This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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