Dealmaking holds steady in US PE middle market while fundraising slows
PE deal activity in the US middle market totaled $228.2 billion in H1—a sharp drop from 2021’s record, but on pace for a healthy year nonetheless. Firms have abundant dry powder, and large GPs averse to making massive bets in the current environment have eagerly turned their eyes to smaller investment opportunities.
Yet the middle market’s size advantage in the dealmaking space proves a hindrance when it comes to fundraising, according to our Q2 2022 US PE Middle Market Report, sponsored by Antares Capital and Baker Tilly.
Key takeaways:
- The crowded fundraising landscape is expected to have its biggest negative effect on the middle market, as LPs pushed near their allocation limits prioritize relationships with larger, more-established fund managers.
- Add-on activity accounted for 73% and 62.5% of deal count and value, respectively—both all-time highs.
- Deal sizes have trended downward, with middle-market deals over $500 million making up their lowest share of count and value in at least a decade.
- Exit activity in Q2 fell for the second consecutive quarter, with the cumulative value of $35.6 billion falling below the average quarterly value for the five years pre-pandemic.
https://pitchbook.com/news/reports/q2-2022-us-pe-middle-market-report?utm_source=google&utm_medium=cpc&utm_campaign=Discovery-Library-Downloads-US&adgroup=Discovery-LD-PE&utm_term=&device=m&utm_content=&_bk=&_bt=606784998680&_bm=&_bn=&_bg=137492693757&kwdaud=&sfid=-dm_pcrid_606784998680_pkw__pmt__slid__productid__pgrid_137492693757_ptaid_&wbraid=Ck4KCQiAhKycBhCqARI9ABB7uiVHf9n-7AG4AxG6_xt5QRVM7IkR1ie7O8-p7ZKw0C79IMWg2RKHwFOS7RH5mk-dZ2MropJf9-NiShoC51E
