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Private equity has breached the $1 trillion buyout deal threshold

Private equity investors closed $284 billion in tech deals in 2021, 90% of which were software deals.

While PE firms were busy buying in 2021, there was a frenzy for exits as well.

Overall, the buyout fund pulled off $957 billion in assets globally, more than doubling a strong 2020 total and beating the five-year average of 131%. The special-purpose acquisition company (SPAC) deals were particularly noteworthy, a 325% increase from a year earlier and reaching $158 billion.

pressure is on

Hugh MacArthur, global head of private equity practice at Bain & Co., says the higher prices paid in 2021 mean there has been increased pressure on deal sponsors to deliver this year.

“Firms with a long track record in a given area are most likely to succeed,” he said. “In order to maximize returns during this high-wired time, it is critical that dealmakers fully understand the microeconomics of the sector, the value creation levers available to pull, and the risks they are writing.”

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