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Private equity investments modest globally in 2013

They also preferred to hold on to their investments as they waited for safer conditions, total exits down 16.7%

Shivani Shinde  |  Mumbai 

in the first three quarters of calendar year 2013 totalled $174.2 billion, down 23.9% compared to the same period in 2011 ($228.8 billion), said a report by Mergermarker M&A round up for Q1-Q3 2012.

Activity in Europe fell to $61.4 billion, a 30.7% drop from the $88.6 billion announced in 2011. Asia-Pacific (excluding Japan) fared worse with a 40.5% decline to $18 billion year-to-date.

Almost 13.1% of total global M&A in Q3 this year was attributable to private equity buyouts, standing at $56.6 billion. This was the lowest value for global Q3 buyouts since 2009 ($24.4 billion). Euro zone unsettlement contributed to a 44.3% drop from Q2 in European buyouts (from $23.3 billion to $13 billion), the largest drop between these quarters since 2007.

The availability of cheap debt in the US made room for more buyouts, borne out by a 15.6% increase in the total value of US buyouts in Q3 2012 ($31.1 billion) as compared with Q3 2011 ($26.9 billion). Total US buyouts ($81.3bn) in 2012 have accounted for 46.7% of global buyouts, a modest 5.8% decline from the same time in 2011 ($86.3 billion) when compared with other regions.

The Carlyle Group made the largest deal in Q3 when acquiring DuPont Performance Coatings from E.I. du Pont de Nemours & Company in a deal valued at $4.9 billion. Deutsche Bank tops the financial advisers ranking by value, advising on 18 deals valued at $23.8 billion in 2012 to date.

Private equity also preferred to hold on to its investment as they waited for safer conditions, said the report. Total exits in Q1-Q3 2012 totalled $202.4 billion, down 16.7% on the same period in 2011 ($243.2 billion).

The cautious global economic outlook was evident on exit premiums. US premiums at 56.5% (37.9% in 2011) supported the reported slow recovery while, not surprisingly, European premiums have decreased to 15% in 2012 so far (31.1% in 2011). Global EBITDA exit multiple, at 10 times, was behind 2011 (12.6 times) and the lowest since 2003. Europe’s 10.9 times was only just higher than the US’ 10 times.


The report did not have details for India specific, but according to the reports for the first half of 2012 by Grant Thorton, the volumes of merger and acquisition and investment by private equity players have come down by 20%. PE investment the value has come down by 31% to $3.8 billion, from $5.5 billion in the first half of 2011. The only aberration to the this was the e-commerce segment, where PE/VC deal activity during the first half of the year mirrored that of same period last year, total deal value rose by 2 times.

First Published: Wed, October 03 2012. 11:31 IST