pitchbook_pe_breakdown_1q2009

8/7/2019 PitchBook_PE_Breakdown_1Q2009

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Private Equity: Data | News | Analysis

PitchBook Data, Inc. (www.pitchbook.com), a private equity-focused research firm, has published a comprehensive set of

stascs analyzing private equity investment trends for 2008. The credit crunch, coupled with the global recession, has

brought the private equity industry down from its dramac 2007 heights. However, private equity firms invested a total of

$186.6 billion in the U.S., the third highest on record behind the $540.5 billion in 2007 and the $286.2 billion in 2006. The total

volume of completed private equity deals for 2008 was the fourth highest at 1,670, just behind 2005s volume of 1,798 deals.

If private equity mega-deals (those over $2.5 billion) were the story of 2007, the story of 2008 is the evaporaon of the mega-

deal. In 2007, mega-deals accounted for $347.6 billion, or 64% of the $540.5 billion invested that year. In 2008 however, they

only accounted for $86.5 billion; a drop of $261 billion or 75%. This change alone accounted for over 70% of the total decline

in private equity investment from 2007 to 2008.

Breakdown 1Q 2009

Private EquityTotal Deal Flow

2008 recorded the 3rd highest amount of invested capital everThe number of deals in 2008 declined 36% from its high in 2007 and finished the year between 2004 and 2005 levelsThe capital invested in 2008 was down 65% from its high in 2007 and finished the year between 2005 and 2006 levels

Source: PitchBook Plaorm

The Private equity



Private Equity: Data | News | Analys

Business Products &Services (B2B) ConsumerProducts &Services (B2C

Financial Services

Healthcare

BEtter Data. Better decisions.

the pitchbookdifference

Source: PitchBook Plaorm Source: PitchBook Plaorm



The Commercial Services industry led this sector with 282 deals in 2008Compared to 2007, the number of deals in 2008 fell 39% to 579 andtotal capital invested fell 78% to $23.04 billionBusiness Products & Services accounted for 35% of deals in 2008

The Consumer Durables industry led this sector with 69 deals in 2008,closely followed by Restaurants, Hotels & Leisure with 61 deals

Compared to 2007, the number of deals in 2008 fell 42% to 402 and totalcapital invested fell 61% to $69.03 billion

Consumer Products & Services accounted for 24% of deals in 2008

The Insurance industry led this sector with 33 deals in 2008Compared to 2007, the number of deals in 2008 fell 22% to 123 and totalcapital invested fell 34% to $37.79 billionFinancial Services accounted for 7% of deals in 2008

The Exploraon, Producon & Refining industry connues to lead this

sector with 60 deals in 2008Compared to 2007, the number of deals in 2008 fell 17% to 137 and totalcapital invested fell 67% to $22.48 billionEnergy accounted for 8% of deals in 2008

The Healthcare Services industry led this sector with 100 deals in 2008

Compared to 2007, the number of deals in 2008 fell 26% to 185 and totalcapital invested fell 59% to $16.43 billion

Healthcare accounted for 11% of deals in 2008

The Soware industry led the IT sector with 64 deals in 2008

Compared to 2007, the number of deals in 2008 fell 44% to 151 and totalcapital invested fell 90% to $7.99 billionInformaon Technology accounted for 9% of deals in 2008

Information Technology

Energy


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Business Products & Services and Consumer Products & Services

remain the dominant sectors, yet both saw significant declines in deal

acvity. Financial Services and Energy were the two sectors that gained

ground from 2007 to 2008 as a percentage of deal flow.

Private equity investment connues to be consistent in its geographical

breakdown. The Midwest saw the most private equity acvity in 2008

accounng for 21% of the deal flow. The West Coast, Northeast,

Southeast and South also remained strong regions for private equity

investment.

The median deal value in 2008 declined to $60 million as the volume of

larger deals (parcularly deals > $1 billion) declined The median deal size for growth transacons has remained

relavely steady over the last five years

The median buyout amount decreased as the volume of

mega-deals declined

The median recapitalizaon increased as large-cap companies

looked to refinance their exisng debt

Median Deal Amount By Year Median Deal Amount By Deal Type






PETransactionsbyIndustrySector, 2008 PE

T

ransactionsbyRegion, 2008


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In 2007, mega-deals (those over $2.5 billion) accounted for $347.6 billion, or 64% of the $540.5 billion invested that year. In 2008, however, mega-deals

accounted for only $86.5 billion of the total capital invested, a drop of $261 billion or 75% from the 2007 high. This decline in mega-deals alone accounted forover 70% of the total decline in private equity investment from 2007 to 2008. Smaller deals, those under $250 million, look to be returning to pre-2006 levels,

when they accounted for 80% of all private equity transacons.

Given the massive amount of leverage used to complete the largest private equity transacons it is no surprise that fewer of theses mega-deals are being done,

or even being considered. Unl credit markets return to a more normal state, private equity investors will have to increase the amount of equity used in

leveraged transacons or connue making more minority investments.

Deals below $250 million regained ground on large deals in 2008. Dealsabove $500 million decreased aer the flood of mega-deals in 2007.

While mega-deals typically receive the most aenon, over 85% of deals

were under $500 million.

Deals above $2.5 billion, while few in number, dominated total capitalinvested yet again; however, deals below $500 million are making a

resurgence as leverage for large deals dries up.

Percent of PETransactions(Count) byDeal Size

Percent of PEInvestment(Total $Amount) byDeal Size




Count of PETransactions byDeal Size

TotalAmount of PEInvestmentbyDeal Size (millions USD)





Number of funds raised in 2008 dropped by 20% when

compared with 2007

Total capital raised in 2008 increased by 6% from 2007

levels

Funds over $5 billion raised nearly 57% of all capital in 2008

Funds below $1 billion raised 12.7% of all capital in 2008

fundraisingACtivity

Fund Count byFund Size Capital Raised byFund Size






Funds over $1 billion made up nearly 28% of the total number offunds raisedFunds between $500 million & $1 billion increased their share to21% this year, from their trailing 5 year average of about 15.5%

The Stateof Private EquityFundraising

PitchBooks aggregated data and stascs covering private equity fundraising in 2008 show that a record $296.58 billion was raised, a 6%increase over all funds raised in 2007. Funds over $500 million connued to dominate private equity fundraising, making up nearly 60% ofall funds closed and accounng for nearly 94% of all capital raised during the year. Over 91% of the total raised in 2008 was closed during

the first three quarters of the year. This early surge helped push the year-end total to historic levels despite a slow fourth quarter.

Fundraising for many of the mega-funds closed in 2008 was spurred on by the historic deal volume of 2007. In 2009, look for declines in thetotal number of funds raised, decreases in fund sizes, and an increase in the number of mezzanine, distressed debt or opportunies fundsseeking capital. On a more posive note, historic levels of fundraising in previous years have produced a record amount of dry powder,which should bolster deal volume in the near term as markets recover.

Largest Funds of 2008FirmGS Capital Partners

TPG Capital

Kohlberg Kravis Roberts

Warburg Pincus

The Blackstone GroupOaktree Capital Management

GS Capital Parners

Advent Internaonal

Bain Capital

Bain Capital

Lone Star Funds

Avenue Capital Group

TPG Capital

Global Infrastructure Partners

Kelso & Co.

New Mountain Capital

TPG Capital

W.L. RossNatural Gas Partners

Morgan Stanely Private Equity

20.0

19.8

17.6

15.0

10.910.9

10.5

10.4

10.0

8.3

7.5

6.1

6.0

5.6

5.1

5.1

4.3

4.04.0

4.0

FundGS Mezzanine Partners V

TPG Partners VI

KKR Associates 2006 Fund

Warbug Pincus Private Equity X

Blackstone Real Estate Partners VIOCM Opportunies Fund VIIb

GS Loan Partners I

Global Private Equity VI

Bain Capital Fund X

Bain Capital Europe III

Lone Star Fund VI

Avenue Special Situaon Fund V

TPG Financial Partners

Global Infrastructure Partners

Kelso Investment Associates VIII

New Mountain Partners III

TPG Asia Partners V

WLF Recovery Fund IVNatural Gas Partners IX

Morgan Stanley Infrastructure Partners


Size ($




Investor Name

Warburg Pincus

The Riverside Company

GS Capital Partners

The Carlyle Group

Audax Group

TPG Capital

Sun Capital Partners

Parthenon Capital

Marwit Capital

The Blackstone Group

H.I.G. Capital

Bain Capital

Lindsay GoldbergKayne Anderson Capital Advisors

Allied Capital

Golden Gate Capital

Lake Capital

American Capital

Equity Based Services

Oaktree Capital Management

Babson Capital Management

Riverstone Holdings

Baird Capital Partners

LLR Partners

Providence Equity Partners

Veronis Suhler StevensonEnCap Investments

Avista Capital Partners

Gryphon Investors

Marlin Equity Partners

Silver Lake Partners

Banc of America Capital Investors

ABRY Partners

Brazos Private Equity Partners

GTCR Golder Rauner

Kelso & Co.

KRG Capital Partners

Vista Equity Partners

Lone Star FundsOne Equity Partners

CCMP Capital

Huron Capital Partners

Peninsula Capital Partners

CI Capital Partners

Thoma Bravo

Welsh, Carson, Anderson & Stowe

Kohlberg & Company

Accel-KKR

Aquiline Capital Partners

Centre Partners

Deal Count

22

21

20

20

19

18

18

16

15

15

14

13

1312

11

10

10

10

10

10

9

9

9

9

8

88

8

8

8

8

8

7

7

7

7

7

7

77

7

7

7

7

7

7

6

6

6

6

Top 10 Law Firms in Private Equity

Kirkland & Ellis

Jones Day

Simpson Thacher & Bartle

Weil Gotshal & Manges

Paul Weiss Rifind Wharton & Garrison

Latham & Watkins

O'Melveny & Myers

Skadden Arps Slate Meagher & Flom

Gibson Dunn & Crutcher

Ropes & Gray

Top 10 Investment Banks & AdvisorsHoulihan Lokey Howard & Zukin

Goldman Sachs

Harris Williams

JP Morgan

Lehman Brothers

Lincoln Internaonal

Morgan Stanley

Lazard Freres & Company

Wachovia Securies

Jones Day

Top 10 Lenders in Private EquityCIT Group

Madison Capital Funding

General Electric Capital

Wells Fargo Foothill

GE Antares Capital

PNC Financial Services Group

Babson Capital Management

Goldman Sachs

Golub Capital Partners

Churchill Financial

Top 10 Fund Placement & Advisory FirmsCredit Suisse Private Fund Group

Lazard Freres & Company

Cigroup

Park Hill Group

Probitas Partners

Champlain Advisors

Atlanc Pacific Capital

JP Morgan

William Blair & Company

Pinnacle Trust Partners

By Number of Investments in 2008

MostActive Private EquityInvestors






Private Equity: Data | News | Analysi

Your Single Source for Quality Private Equity DataOnly PitchBook tracks the entire private equity lifecycle and every party involved:

providers and key professionals. By dynamically linking these parties, PitchBook

makes it easy to identify relationships and networks. Additionally, it activelyresearches target companies the entire time they are in an investors portfolio so

that youll always be up-to-date on the crucial details of a transaction and the

companys progress.

Broadest Private Equity Coverage

The PitchBook Platform contains information on over 25,000 private equity-

backed companies, investors, and service providers, across every industry

segment, every deal size and every private equity deal type from announcement to

Deepest Level of Detail

background research.

Deal monitoring and research through the entire lifecycle.

Without exception, PitchBook actively researches and reports

announcement.

Full spectrum coverage.PitchBook covers the full spectrum of private equity deals: all sizes, all industries, and all types.

No shortcuts. It takes meticulous research to produce complete, consistent, timely, and accurate information, and we devote themanpower and resources necessary to make this happen.

Laser-focused.

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