Tue, Jun 24, 2014

Private Equity Environment Bullish Amid Expanded International Opportunities and Positive Fundraising Prospects

Competitive landscape, regulatory uncertainty emerge as principal challenges going forward

Amid heightened competition and regulatory uncertainty, the private equity industry is exhibiting growing confidence and appetite for investment. A study jointly released today by global valuation and corporate finance advisor, Duff & Phelps, and international law firm, Shearman & Sterling LLP, underscores these conclusions and related key findings in its inaugural Global Private Equity Outlook report published in association with Mergermarket.

  • The value of year-to-date exits at US$227bn is fast approaching 2013’s total of US$282bn.
  • Survey respondents expect the consumer and integrated TMT sectors to have the best opportunities for private equity. Interest in the integrated sector is driven by technology investments, which comprise 75% of year-to-date TMT buyouts. There were 149 TMT buyouts worth approximately US$28bn so far this year.
  • On average, cross-border transactions will make up 30% of respondents’ acquisitions over the next 12 months. The notable proportion of cross-border investments by PE firms can be attributed to attractive investment opportunities across the globe. Survey respondents report that 66% of North American, 40% of European and 33% of Asia-Pacific will access foreign markets for financing.

More than a quarter of respondents (28%) think that regulatory and compliance risks are the top challenges faced by private equity firms. "Across geographies and industry sectors, private equity professionals express optimism,” noted Bob Bartell, Global Head of Corporate Finance at Duff & Phelps. “Competition is growing, but the industry is confident that strong investment pipelines, financing accessibility, and exit options will all contribute to a vibrant industry in the year ahead and beyond.”

Despite the general optimism, respondents cite challenges related to regulatory hurdles, compliance risk and increasing competition for assets. Jeremy Dickens, Global Co-Head - Private Equity Practice, at Shearman & Sterling explains, “The classic private equity fund is facing stiff competition from a new breed of investors, including sovereign wealth funds, state-owned enterprises, pension plans, specialist funds and large family offices. This has led to fundamental changes in the private equity marketplace.”

The report also reviews the diverse strategies that private equity firms employ to retain competitive advantages and maximize the desired yield from their investments, including a renewed focus on operational improvements. It also considers the impact of the industry’s current regulatory environment on the industry, which, while traditionally lightly regulated, faces increased oversight. Finally, the survey results address the various drivers of buyouts and exits in the current market and explore regional and industry-specific trends.

Click here to read the full report.

About Mergermarket
Mergermarket is the leading provider of forward-looking M&A news and intelligence for M&A professionals and corporates. With an unrivalled network of 300+ journalists based in 65 locations worldwide, Mergermarket is the only specialized media service that offers active analysis of corporate strategy before it becomes public knowledge, and a historical deals database to analyze past deals. Mergermarket is part of The Mergermarket Group. For more information visit www.mergermarket.com or follow us on Twitter at @mergermarket.

About Duff & Phelps 
Duff & Phelps is the premier global valuation and corporate finance advisor with expertise in complex valuation, dispute consulting, M&A and restructuring. The firm’s more than 1,000 employees serve a diverse range of clients from offices in North America, Europe and Asia. For more information, visit www.duffandphelps.com.
M&A advisory, capital raising and restructuring services in the United States are provided by Duff & Phelps Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Duff & Phelps Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Duff & Phelps Securities Ltd., which is authorized and regulated by the Financial Conduct Authority.

About Shearman & Sterling LLP
Shearman & Sterling LLP, an international law firm with approximately 850 lawyers in many of the commercial centers around the world, has led the way in serving clients wherever they do business. This innovative spirit and the experience the firm has developed over its 140-year history have made it the “go-to” law firm. From major financial centers to emerging markets, the firm has the reach, depth and global perspective necessary to advise clients on their most complex worldwide business needs. Visit www.shearman.com


Chrissy Carney 
PR Manager-Americas 
The Mergermarket Group 
[email protected]

Jennifer Sanders 
Managing Director 
Perry Street Communications 
[email protected]

Ron Brandsdorfer 
Director, External Communications 
Shearman & Sterling LLP 
[email protected]



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