Private Equity Demonstrates Resilience And Sustained Growth In 2016

Investment Volume Reached Second Highest Level In The Last Decade

WASHINGTON– Today, the American Investment Council (AIC) released its 2016-Q4 Private Equity Trends Report which showed investment volume last year reached its second highest level since 2007. In addition, equity financing’s contribution to capital reserve bases increased, reaching 43 percent in 2016.

“The latest numbers show a sustained growth of the industry throughout 2016,” said AIC President and CEO Mike Sommers. “When compared to the past decade it is clear private equity’s business and investment partners performed exceedingly well last year, in turn fostering economic growth for the country.”

The 2016-Q4 Trends Report also shows exit volumes last year fell by 23 percent compared to 2015. Meanwhile, global buyout funds’ callable capital reserves, or “dry powder,” rose in 2016 from the previous year.

“The 11 percent increase in dry powder from the Q4 Trends Report is a sign that the industry is poised for more acquisitions in 2017,” said Bronwyn Bailey, AIC Vice President of Research and Investor Relations, adding that while fundraising dropped by eight percent since last year, “fundraising is still well above levels we saw just a few years ago.”

Below are five key findings from the report. Read the full report here.

  1. U.S. PE Investment Volume Drops: Annual U.S. private equity investment volume experienced a drop from $739 billion in 2015 to $653 billion in 2016.
  2. Equity Contributions Slightly Increase: Total equity financing for U.S. leveraged buyouts increased to 43 percent in 2016.
  3. U.S. Fundraising Drops: Annual U.S. private equity fundraising volume fell from $203 billion in 2015 to $187 billion in 2016.
  4. Dry Powder Grows: Callable capital reserves (“dry powder”) of global buyout funds rose from $473 billion in December 2015 to $526 billion in January 2017.
  5. Exit Volumes Fell: Annual U.S. private equity exit volume fell from $416 billion in 2015 to $321 billion in 2016.

About the American Investment Council

The American Investment Council (AIC) is an advocacy and resource organization established to develop and provide information about the private investment industry and its contributions to the long-term growth of the U.S. economy and retirement security of American workers. Member firms of the AIC consist of the country’s leading private equity and growth capital firms united by their successful partnerships with limited partners and American businesses. More information about the AIC can be found at www.investmentcouncil.org.

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