Eamon
Deal prices for portfolio companies stood at 7.2x EBITDA at the end of the third quarter of 2012.
U.S.-based financial sponsors seem to be holding on to their investments longer these days, based on the numbers Buyouts has tracked on the M&A and IPO fronts. On a quarter-to-quarter basis, both exits strategies seem to be in less use at the end of each period.
U.S.-based buyout and mezzanine shops have secured about $129.5 billion in its fundraising efforts through the first nine months of 2012. In addition, disclosed deal volume is around $57.6 billion through Sept. 17.
Given that even in the best of times it’s never easy to raise money, buyout shops may want to pay more attention to recycling provisions in the months ahead.
Exits through M&A have been recovering nicely for buyout shops since 2008, good news for buyout professionals hoping to collect more carried interest.
Standard & Poor’s classified slightly more entities as at risk of a debt default last month, compared with its view in late May. By our count, the number with financial sponsors dropped by one to 17 over the same period
Buyout and mezzanine firms based in the United States have raised $120.17 billion so far this year, reflecting a number of interim and final closings including the $2.5 billion close of Blackstone Energy Partners LP, which had a $2 billion target.
The high-yield corporate debt market is showing signs of strength in the United States, where proceeds are up 12 percent from a year earlier, helping to fuel a minor buyout binge.
The New York attorney general, Eric Schneiderman, is investigating a tax strategy that buyout firms employ whereby LPs agree to waive a percentage of management fees upfront in exchange for an equivalent amount to be paid later from partnership profits.
Silver Lake’s Fund III may hold the top IRR return at 19.7 percent among the mega funds of 2006 and 2007, but Apollo Global Management LLC has two of its investment vehicles in the top five.