2018全球私募股权投资报告（英文版）_78页_7mb

2018 Global Private Equity Report Summary

Core Content Overview

The 2018 Global Private Equity Report provides an in-depth analysis of the private equity (PE) industry in 2017, highlighting its achievements, challenges, and evolving strategies. The report outlines the key dynamics influencing the market, including investment trends, exit performance, fund-raising activity, and the role of technology and corporate competition.

Main Points and Key Insights

1. Market Performance in 2017

• Investments: Despite a crowded market and fierce competition, global buyout investment value increased by 19%, reaching $440 billion in 2017, driven by large public-to-private deals and add-on transactions.
• Deal Count: The number of deals remained relatively flat, with a 2% increase to 3,077 deals, a 19% decline from 2014 levels.
• Add-on Deals: Add-ons became a significant part of PE activity, comprising half of all deals in 2017, but only 25% of total deal value due to their smaller size.
• High Multiples: Average purchase price multiples for leveraged buyouts (LBOs) reached historic highs, with over half of all acquisitions priced above 11x EBITDA. This created challenges for GPs to justify returns.
• Dry Powder: Global dry powder reached a record high of $1.7 trillion in December 2017, indicating strong capital availability.
• Debt Leverage: Debt markets were robust, with average debt/EBITDA multiples rising to 6x, and some deals reaching 8x EBITDA. Covenant-lite loans became increasingly common, making leverage easier to obtain.

2. Challenges and Risks

• Overheating Concerns: The influx of capital and high valuations raised concerns about market overheating.
• Regulatory Scrutiny: Multiples above 6x EBITDA attracted regulatory attention, limiting the ability to push further leverage.
• Competition: The number of PE firms increased to 7,775, intensifying competition for deals. Corporate buyers, with lower cost of capital and strategic advantages, often outbid PE firms.
• Zombie Funds: Some funds, which had not raised capital since 2008 and had not executed a deal since 2015, remained active, presenting potential targets for ownership change.
• Uncertainty: The macroeconomic outlook, particularly in the US and Europe, raised concerns about the sustainability of the economic expansion, with many base cases now including recession scenarios.

3. Strategies to Respond to Challenges

• Proactive Deal Sourcing: GPs are actively seeking undervalued assets, including sponsor-to-sponsor deals and corporate carve-outs.
• Long-Hold Funds: A growing number of PE firms are extending holding periods beyond the traditional five years to better manage value creation and integrate acquisitions.
• Commercial Excellence Programs: Firms are investing in organic revenue growth and cost optimization to enhance returns, especially in sectors like retail healthcare, which showed strong growth potential.
• Digital Transformation: The industry is emphasizing digital savvy as a critical factor in identifying and leveraging new opportunities, with Amazon serving as a prime example of how technology disrupts traditional business models.
• Public-to-Private Activity: The trend of converting public companies to private ownership continued, with the total value of such deals reaching $180 billion in 2017, nearly double the previous year. The number of potential targets in the US public markets was estimated at 72 companies, making this a promising avenue for future growth.

4. Exit Trends

• Exit Value: Global buyout-backed exit value increased to $366 billion in 2017, surpassing 2016 levels but still below the peak of $464 billion in 2014.
• Exit Count: There were 1,063 exits in 2017, with North America and Europe showing growth in exit value despite fluctuations in deal count.
• Asia-Pacific: Exit value declined by 16%, but when including minority stakes and public company sales, it increased by 18% to $115 billion, showing a more diversified exit strategy.

Key Takeaways

• The private equity industry in 2017 experienced strong investment and exit performance, but challenges in deal sourcing and valuation persisted.
• High valuations and competition have led to a shift in focus toward add-on deals and public-to-private conversions.
• Digital transformation and commercial excellence are becoming essential for value creation.
• Longer holding periods and strategic partnerships with management are being adopted to better navigate market uncertainty.
• The future of the industry depends on maintaining discipline in deal-making and adapting to changing macroeconomic conditions.

Spotlight on Key Sectors

Retail Healthcare

• The retail healthcare sector emerged as a notable growth area.
• Attractive targets were available due to slowing economic growth and increased focus on healthcare services.
• PE firms are leveraging this sector to create value through add-on strategies and organic growth.

Long-Hold Funds

• A small but growing number of PE firms are adopting longer holding periods.
• This approach allows for more time to nurture growth, integrate acquisitions, and implement transformative strategies.
• It reflects a shift in the industry's focus from short-term returns to sustainable value creation.

Conclusion

The 2017 private equity market was marked by high valuations, increased capital inflows, and intensified competition. While the industry delivered strong returns and deal activity, it faced the challenge of maintaining discipline and finding new sources of value. The future will depend on strategic adaptation, innovation in value creation, and effective management of macroeconomic risks.