Executive Summary
Private Equity
According to PitchBook’s breakdown of private equity in the U.S., PE fundraising decelerated sharply in the 1Q18, totaling $36.6 billion across 55 vehicles, down from $55.8 billion in the 1Q17. Deal flow remained strong by volume relative to the 1Q17, declining only 4% to 1,101 transactions, while total deal value fell 32.8%. Reported figures are expected to improve in the coming months though, as 124 deals worth $94.3 billion have been announced but not yet closed in 2018.
Leverage Lending
According to Thomson Reuters, leveraged loan issuance reached $362 billion in the first four months of 2018. While total volume is down 30% from last year, the institutional share of total volume remained stable at 70%. Refinancing continued to drive activity, with new money accounting for only 30% of volume in April.
Venture Capital
Both the amount of funding and the size of various funding rounds reached new heights during the 1Q18. Companies continue to receive large funding rounds at all stages, putting little pressure on mature startups to seek avenues for exit. However, the announcement of a potential IPO by notable companies such as Uber in the coming years could create momentum for others to follow.
Whether Q1 is indicative of a trend that will continue throughout 2018 or the result of a spike in deal activity is yet to be seen. Deal volume of $28.2 billion represents a compound growth rate of 3.0% per quarter since 1Q10. IPO activity was also more favorable than recent quarters, with more than $2 billion exited through public offerings. However, exits overall remained low.
FEATURE ARTICLE
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Also in This Issue
Updated Metrics for
Private Credit and Equity
Publicly Traded Private Credit
Venture Capital