U.S. Private Equity Investment Steady Amidst A Stormy Q2
American Investment Council’s Q2 Trends Report Highlights Activity In Private Equity Industry
WASHINGTON, D.C. – The American Investment Council (AIC) released its 2016 Q2 Private Equity Trends…
American Investment Council’s Q2 Trends Report Highlights Activity In Private Equity Industry
WASHINGTON, D.C. – The American Investment Council (AIC) released its 2016 Q2 Private Equity Trends Report today, highlighting activity in the private equity industry for the second quarter of 2016. Overall U.S. private equity investment volume amounted to $146 billion for the quarter, a slight decrease from the first quarter but on par with investment levels from Q4 of 2015. The industry also ramped up exit activity in the second quarter after experiencing a slowdown in Q1, increasing 25 percent to $83 billion in exit volume.
“Even as global markets seem uncertain, this report indicates that private equity continues to remain a steady force for the U.S. economy,” said AIC President and CEO Mike Sommers. “The capital invested through private equity helps create jobs and grow our economy, all while securing the retirements of hard working Americans by providing pensioners with higher returns, net of fees, than all other asset classes.”
The report’s findings also reveal healthy fundraising volume and record levels of callable capital reserves. U.S. fundraising levels fell to $49 billion, but registered its second highest level for any Q2 over the past decade. Global callable capital reserves, or “dry powder,” committed to buyout funds exceeded previous year end totals for each of the last 13 years, with a total of $518 billion in reserves at the end of June.
Bronwyn Bailey, AIC Vice President of Research and Investor Relations, noted that the strong metrics bode well for the industry. “With investment on par with previous Q2 levels and continued healthy fundraising, private equity funds are well positioned despite the relatively rocky market conditions during the first half of 2016 and potentially through early 2017. It’s during times of uncertainty that private equity has historically made some of the most profitable investments, which lead to strong returns for its investors.”
Below are five key findings from the report. Read the full report here.
- PE Investment Nearly Levels: U.S. private equity investment volume fell slightly from $156 billion in Q1-2016 to $146 billion in Q2-2016.
- Equity Contributions Fall: Total equity financing for U.S. leveraged buyouts fell to 45% in Q2-2016.
- Fundraising Falls: U.S. private equity fundraising volume decreased from $59 billion in Q1-2016 to $49 billion in Q2-2016.
- Dry Powder Continues To Grow: Callable capital reserves (“dry powder”) of global buyout funds rose from $496 billion in March 2016 to $518 billion in June 2016.
- Exit Volumes Pick Up: U.S. private equity exit volume rose from $67 billion in Q1-2016 to $83 billion in Q2-2016.
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.
