PEs make merry globally with 33% growth, Asia lags behind

The private equity business is humming along nicely. Its wow factor can be gauged from the fact that the deals scaled a record high of $76 billion in the April-June period, up by a cool 33 percent from the previous quarter.

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The June quarter figures are an eye opener. They grew 33 percent from deals valued at $56.5 billion in the January-March period of 2011, according to data compiled by global research firm Preqin. "During Q2, 674 PE-backed buyouts valued at $75.6 billion were announced, surpassing the previous post-Lehman high of $67.4 billion from 689 deals in Q4 2010," it said.

With an exit transaction size of $120.1 billion, PE firms made an exit from 309 companies, during the June quarter. "There was a surge in global private equity deal and exit-flow in Q2 2011, and once again it reached record levels," Private Equity Deals Manager Manuel Carvalho said.

The extra shine on PE vertical is partially attributed to a jump in larger deals, with 21 deals valued at over $1 billion announced during second quarter, compared to 13 transactions in the first quarter of 2011, the report said.

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Deal flow in Asia, however, witnessed a slight drop from the previous quarter, with total pacts worth $6.3 billion being announced in the region in the second quarter, compared to those valued at $10.6 billion in the first quarter.

The quarter under review saw a surge in secondary buyouts globally, with secondary buyouts worth $24.4 billion announced during the June quarter, more than double the $11.5 billion announced during the March quarter of 2011.

The largest deal of the quarter was acquisition of a 70 percent stake in Frac Tech by RRJ Management, Temasek Holdings, Chesapeake Energy Corporation and the CPP Investment Board in a deal valued at $3.5 billion. This is followed by buyout of Securitas Direct by Hellman & Friedman and Bain Capital from EQT Partners for $3.3 billion.

During the June quarter, 309 PE-backed exits occurred, with an exit transaction size of $120.1 billion. This was a 47 percent jump in aggregate exit value compared to the previous quarter, when exits valued at $81.5 billion took place.

"Exit flow hit all-time record levels of $120.1 billion globally in Q2 2011, with fund managers in recent quarters taking advantage of the return of trade buyers with high levels of cash at their disposal and relatively robust financial markets to begin to exit investments made during the buyout boom-era," Carvalho added.

(With inputs from PTI)