1、GLOBAL PRIVATE EQUITY REPORT 2019每 日 免 费 获 取 报 告1、 每 日 微 信 群 内 分 享 7+最 新 重 磅 报 告 ；2、 每 日 分 享 当 日 华 尔 街 日 报 、 金 融 时 报 ；3、 每 周 分 享 经 济 学 人4、 行 研 报 告 均 为 公 开 版 ， 权 利 归 原 作 者所 有 ， 起 点 财 经 仅 分 发 做 内 部 学 习 。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。 About Bain liquidity solutions for general partners; and the Chinese
2、PE market, which is on the leading edge in areas like technology.We close our 2019 review of important trends in private equity by getting out our crystal ball. Its a bit cloudy (as is everyones), but we see fundamental shifts happening in capital markets that are likely to drive a long-term trend t
3、oward much larger private capital (and private equity) opportunities vs. traditional public equity models. This ongoing movement will have seismic impacts for providers of capital, investors of that capital and for the companies owned by a widening variety of private models. It portends a future in
4、which a much larger share of capital flows into private markets. Perhaps this is indeed the beginning of “the rest of the story” for the PE industry.Hugh MacArthur Head of Global Private EquityGlobal Private Equity Report 2019nullGlobal Private Equity Report 201931. The private equity market in 2018
5、: What happened?As the current economic expansion chugged into its ninth full year in 2018, the global private equity (PE) industry continued to make deals, find exits and raise capital at a historic five-year pace. Limited partners (LPs) remain highly enthusiastic and have continued to flood the ma
6、rket with fresh capital. Keeping the momentum going, however, has hardly been easy. Chronically heavy competition has driven deal multiples to historic highs, and growing jitters about an eventual economic downturn are affecting decision making, from diligence to exit planning. For general partners
7、(GPs), putting record amounts of capital to work means getting comfortable with a certain level of discomfort when investing. They are paying prices they swore they would never pay and looking to capture value that may prove elusive post-close. The most effective GPs are stepping up their game to id
8、entify targets and sharpen diligence, while simultaneously planning for the worst. In Sections 2 and 3, well explore several strategies firms are using to make the most of an increasingly difficult market. In the meantime, heres what happened in 2018. null.null.nullnullvestments: nullre strengthnull
9、same nullanullengesAmid heavy pressure to do deals, the PE industry saw another impressive surge in investment value in 2018. Fierce competition and rising asset prices continued to constrain deal countpushing down the number of individual transactions by 13%, to 2,936 worldwidebut total buyout valu
10、e jumped 10% to $582 billion (including add-on deals), capping the strongest five-year run in the industrys history (see Figure 1.1). While the current investment cycle hasnt been a steady upward march, especially in terms of deal count, it has shown great resilience and overall strength. Every year
11、 since 2014 has produced higher deal value than any year in the previous cycle, with the exception of the peak in 2006 and 2007. Over this period, the industry has benefited from an unprecedented wave of investor interest, buttressed by ebullient equity markets, low interest rates and steady GDP gro
12、wth in the US and Europe. For GPs, it has been a remarkable run.Predictably, experts are debating how long the good times can last. Only one other US recovery on record (from 1991 to 2001) has extended as long as this one. While GDP growth in the West remains strong, US interest rates are rising as
13、inflation picks up in the US and Europe. Slowing growth in China, global trade tensions, ongoing uncertainty about Brexit and year-end market volatility are all fueling concern that this cycle may be running its course. For PE firms, however, the question isnt so much when the next downturn will app
14、ear as how to nego-tiate it successfully when it does. With record amounts of capital to invest, it doesnt pay to sit idle trying to time the downturn. Instead, GPs are finding ways to cope with a growing level of macro uncertainty Global Private Equity Report 2019nulland planning carefully for how
15、they can profit from the downturn. With the global financial crisis fresh in their memories, firms are focusing their diligence much more intently on downside scenarios this time around. They learned valuable lessons during the crisis about what holds up well through the cycleor notand are adjusting
16、 accordingly. Even within a sector like healthcare, widely viewed as recession-resistant, there were subsector differences in performance worth noting. Healthcare support services, for instance, produced multiples of better than two times invested capital, while healthcare equipment and pharmaceutic
17、als fared less well, according to CEPRES, a digital investment platform and transactional network for the private capital markets (see Figure 1.2). Spotting pockets of opportunity has been a challenge even in the up-cycle. For GPs, finding the right asset at the right price was the biggest constrain
18、t on doing deals in 2018. That helps explain why the number of transactions has remained stubbornly flat, bouncing around between 3,000 and 4,000 buyouts per year since 2010. Indeed, despite the industrys impressive showing over the last five years, it has failed to carve out a larger share of the g
19、lobal market for mergers and acquisitions, which has hovered around 40,000 transactions per year for a decade (see Figure 1.3). When asked what most gets in the way of closing more deals, GPs cite the same challenges they have faced for years: high deal multiples, a dearth of attractive targets and
20、stiff competition (see Figure 1.4). GPs are clearly hungry to do more deals, but when they find attractive assets, they consistently en-counter aggressive corporate buyers willing to push up auction prices. These buyers are strategic, 0200400600800$1,000B01,0002,0003,0004,0005,000Global buyout deal
21、value (including add-on deals)1996 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 1892929333636374140404517 48 48 49 4225 25 27 33 29 27 28Add-on countpercentage14 17 10 11 13 21 12 25 21 14 3116 43 21 24 2316 15 20 16 81112Add-on valuepercentageDeal count22%9%4%53%13%CAGR(1718)North
22、 America EuropeAsia-PacificRest of world Total countNotes: Excludes loan-to-own transactions and acquisitions of bankrupt assets; based on announcement date; includes announced deals that are completed orpending, with data subject to change; geography based on targets locationSource: Dealogicnullgur
23、e 1.1: .nullsing.nullal.value.in.null1null.cappenull.the.strongest.nullenullear.stretch.in.history,petition.annull.rising.asset.pricesGlobal Private Equity Report 2019null020406080100%Business support servicesGeneral industrialsChemicalsConstructionNatural resources/energy equipmentand servicesTrans
24、portation servicesFood and beveragesMediaRetailSpecialized consumer servicesTextilesTravel and leisureMiscellaneousInternetSemi-conductorsSoftwareOther techHealthcarefacilitiesHealthcareequipmentHealthcaresupportservicesPharma andbiotechServicesBanksInsur-anceMisc.TelecominfrastructureNatural resour
25、ces/energyinfrastructureTelecomequipmentand servicesMiscellaneousGlobal buyout equity capital invested, by sector and subsector (200608)IndustrialsLess than 1.0xGross pooled MOICMiscellaneousConsumerTechnologyMisc.Health-careMisc.FinancialservicesOther1.0x1.5x 1.5x2.0x 2.0x2.5x Greater than 2.5x Una
26、vailableNotes: Includes realized and unrealized buyout deals with invested equity capital of $50 million or more and initial investment between January 1, 2006, andDecember 31, 2008; MOIC stands for multiple of invested capitalSource: CEPRES PE.Analyzernullgure 1.2: .nullturns.nullring.the.global.nu
27、llancial.crisis.were.all.over.the.mapnulletween.sectors.annull.within.sectors0102030%Global buyout share of total M corporate Mbased on announcement date; includes announced deals that are completed or pending, with data subject to changeSource: Dealogic200405 06 07 08 09 10 11 12 13 14 15 16 17 180
28、51015%Global buyout share of total M based on announcement date; includes announced deals that are completed or pending, with data subject to change; geography basedon targets locationSource: Bain global public-to-private deal databasePrevious boom yearsnullgure 1.null .nullblicnullonullrivate.nulla
29、ls.reachenull.their.highest.level.since.the.previous.boom.years,.in.terms.onull.both.value.annull.countGlobal Private Equity Report 2019nullvalues, the dry powder held in buyout funds today represents 3.0 years of investment, vs. 4.6 years in 2007 and 2008. That duration is well below the buyout ind
30、ustrys typical five-year investment time frame, suggesting that GPs have time to get unspent capital into the market. Of course, duration would rise if a recession developed over the next couple of years, but it would take a major downturn to produce a significant spike. Dealmaking would have to dro
31、p to the 201012 average for a sustained period of timean unlikely scenariofor duration to push back above the five-year mark. It helps that PE funds are accumulating mostly “young” capital, raised by funds with recent vintages. Buyout firms hold 67% of their dry powder in funds raised in the last tw
32、o years (see Figure 1.7). That means the recent deal cycle is clearing out the older capital and replacing it with new. The debt markets encouraged GPs to keep doing deals through much of 2018. Despite the rise in US interest rates, the updraft was slow to be felt in loan pricing. Lenders, meanwhile
33、, were competing aggres-sively to extend credit on easy terms. So-called covenant-lite loans have become increasingly common in lending markets in the second half of this cycle, and debt multiples have entered territory not seen since the peak of the last cycle. In the years following the global fin
34、ancial crisis, regulators discouraged multiples of six times earnings before interest, taxes, depreciation and amortization (EBITDA). Yet in the Trump eras more relaxed regulatory environment, the share of deals with multiples of greater than seven times EBITDA rose to almost 40% of the total, accor
35、ding to Loan Pricing Corp. (LPC), which tracks the syndicated loan market (see Figure 1.8). The true leverage deployed in many deals may also have been understated: As is often the case in times of high risk tolerance, banks have allowed borrowers 0.00.51.01.5$2.0TGlobal PE dry powder20030.4040.4050
36、.6060.8071.0081.1091.1101.0111.0120.9131.2141.2151.4161.5171.8182.0184 357 424441 475516 602 695176 256 374 438 478 479 424 392Buyout ($B)As of year-end15%5%11%28%8%7%31%10%1%CAGR(1718)BuyoutReal estateVenture capitalGrowthInfrastructureDistressed PEDirect lendingMezzanineOtherNote: Discrepancies in
37、 bar heights displaying the same value are due to rounding Source: Preqin nullgure 1.null .nully.pownullr.continues.to.pile.up.globally,.setting.a.new.recornull.in.null1nullGlobal Private Equity Report 2019null020406080100%As of year-endDistribution of global buyout dry powder, by fund age2009 10 11
38、 12 13 14 15 16 17 18Younger than2 years25 yearsOlderSource: Preqin nullgure 1.null .nullrms.are.holnullng.the.manullrity.onull.their.nully.pownullr.in.their.youngestnullintage.nullnnull020406080%Share of overall US LBO market, by leverage level2003 04 05 06 07 08 09 10 11 12 13 14 15 16 17 186x lev
39、erageor greater 7x leverageor greaterSource: LPCnullgure 1.8: monGlobal Private Equity Report 20191null024681012xAverage EBITDA purchase price multiple for US LBO transactions20037.3047.7058.5068.9079.9089.8098.6109.1119.0129.2139.31410.21510.31610.71711.01810.9First-liendebt/EBITDAJunior debt/EBITD
40、AEquity/EBITDASource: LPCnullgure 1.null .nulle.average.multiple.nullr.null.leveragenull.buyouts.continues.to.hover.near.recornullhigh.levelsto calculate multiples based on projected earnings instead of actual results. Such calculations tend to bake in expectations for cost cutting, synergies and re
41、venue increases that may or may not materialize. As hot as the debt markets were for most of 2018, there were signs near year-end that things were cooling off. Amid heavy market volatility, Bloomberg reported that US leveraged loan funds saw $15.7 billion in outflows from November 21 to January 2, a
42、 seven-week rout that included the worst week on record. The news service also reported that Wells Fargo and Barclays had failed to sell a $415 million leveraged loan related to Blackstones $700 million purchase of oil services firm Ulterra Drilling Technologies. Bloomberg said the banks reportedly
43、planned to hold the loan on their books until they could once again try to unload it in January. The heavy competition for assets and the flood of capitalboth debt and equityinto the market since 2014 has had the inevitable effect of raising asset prices to all-time highs. The average multiple for l
44、everaged buyouts in the US and Europe has hovered around 11 times EBITDA in recent years, above levels leading up to the global financial crisis (see Figure 1.9). These dynamicsabundant capital on easy terms, pressure to do deals, rising asset prices and an uncertain economic outlookraise all the us
45、ual end-of-cycle red flags. The best-positioned firms are adjusting their approach in several ways, both to win more auctions without overpaying and to hedge against the risk of a downturn. Global Private Equity Report 201911 With asset prices high and competition fierce, the most effective firms ar
46、ent pulling back. Rather, they are preparing themselves to either go big or go home. They are dialing in on the sweet spots and sectors where they are most confident, making clear calls on which auctions to show up for and which to avoid, as well as which teams to deploy. By starting diligence earli
47、er and bringing in performance improvement experts, firms are working to build greater conviction about assets so they can bid more intelligently. Firms are also taking steps to get better access to target company management and data. That can strengthen the relationship and improve insights, giving
48、 the firm an edge against less-prepared bidders. In Europe, firms are taking it a step further: They are increasingly launching preemptive bids in an attempt to win an auction process before it starts. As we mentioned earlier, firms are paying much closer attention to what might disrupt their care-f
49、ully prepared value-creation plans and looking to avoid blind spots. Not only are they running through more robust downside scenarios to pressure test investments, but theyre also anticipating other challengeshow to cope proactively with digital disruption, for instance, or how to negotiate issues like consolidation in the supply base. Downturns inevitably create opportunities as markets stall and target company performance weakens. Historically,
