BDO USA Releases Seventh Annual PErspective Private Equity Study

According to BDO USA’s 2016 PErspective Private Equity Study, an annual survey of private equity fund managers in the United States and Western Europe, 95 percent of PE firms plan to close five deals or less in the coming year. The comparable statistic from last year’s survey was 87 percent, which suggests that the deal market is getting more challenging.

The study also found that firms are largely planning to maintain 2015 investment levels and priorities as they wait out economic turbulence. Seventy-eight percent of fund managers say they invested $100 million or less in 2015, while another 78 percent anticipate deploying this same level of capital over the next 12 months. PE firms also remain focused on new platform deals, with two-thirds of respondents saying they directed the lion’s share of their 2015 investments to new deals, comparable to the proportion reported in last year’s study. Add-ons were the second mostpopular use of capital, cited by 24 percent of fund managers. When asked which factors they expect to drive deal flow in the year ahead, 31 percent of respondents point to private equity exits, and another 31 percent cite private company capital raises and sales.