Last month, CMF attended the Association for Corporate Growth’s InterGrowth conference in Orlando, FL, and we surveyed many of the 68 middle market private equity funds we met with at the event. Below are the results from our Spring 2015 survey, compared to prior results from surveys conducted at the same conference in 2014, 2013, and 2012.
Key highlights from the survey results include:
- Purchase multiples averaged less this year than last year
- Qualitatively, while this decrease in pricing might seem surprising, we heard that many groups are spending less time in high-price auction processes, and focusing more on leveraging their executive network to find less broadly-marketed investment opportunities
- The data indicates that the timing on the total length of deal processes is more evenly distributed than in prior years, with the peak average at six to eight months
- Surprisingly, there is optimism within the portfolio regarding aggregate revenue growth in 2015, with the peak (40% of respondents) indicating a range of 10-15% increase over the prior year, compared with peak respondents in 2012, 2013, and 2014 indicating a range of 5-10%
These results appear to be consistent with PitchBook’s latest “Private Equity Middle Market Report,” which indicated that 78% of deals completed in Q1 2015 were in the middle market, and this increase (up from 72% in 2014 and 69% in 2013) is due to increased competition based on prices outside of the middle market. See PitchBook’s latest report here.
Click here to read CMF’s full survey results and view the data.
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