AMERICAN INVESTMENT COUNCIL
2017-Q4 Private Equity Industry Investment Report 2
Table of Contents
Page
Executive Summary 3 Business Products & Services 5 Consumer Products & Services 7 Information Technology 9 Financial Services 11 Healthcare 13 Materials & Resources 15 Energy 17
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Executive Summary
In 2017, nearly two thirds of U.S. private equity investment targeted companies in the Business Products and Services (B2B), Consumer Products and Services (B2C), and Information Technology sectors. These sectors accounted for approximately $341 billion of the $542 billion invested last year. These sectors were followed by Healthcare, which received $83 billion, while Energy, Financial Services and Materials and Resources collectively received $118 billion in investment.
Overall, investment in 2017 declined, falling from $646 billion in 2016 to $542 billion in 2017, despite record high levels of callable capital. Each sector, with the exception of Healthcare, received less investment in 2017 than the previous year. The largest decline in investment was in the Information Technology sector falling $71 billion to $94 billion from the previous year. Financial Services also experienced significant declines in investment, dropping to $45 billion from $62 billion in 2016. Other sectors— Business Products and Services, Consumer Products and Services, Energy, and Materials and Resources saw modest declines. In contrast Healthcare companies received $11 billion more investment in 2017, rising to $83 billion.
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2017 Industry Investment
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Business Products & Services (B2B) Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Apollo Investment, Avantor Performance VWR International 11/21/2017 $6.40 Materials, et al* United States Infrastructure 12/01/2017 $2.00 Partners Group Corporation West 10/10/2017 $2.00 Apollo Global Management
*Goldman Sachs Merchant Banking Division, New Mountain Capital
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Source: PitchBook 6
Business Products & Services Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20 deals. TVPI is as of December 2017.
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Consumer Products & Services (B2C) Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Ten-X 10/03/2017 $1.60 Thomas H. Lee Partners General Atlantic, Red Ventures, Silver Lake Bankrate 11/08/2017 $1.44 Management
Stratford School 12/09/2017 $0.50 Primavera Capital Group
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Source: PitchBook 8
Consumer Products & Services Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20 deals. TVPI is as of December 2017.
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Information Technology Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Elliot Management, Juna Equity Partners, Gigamon 12/27/2017 $1.60 Qatar Investment Authority Securus Technologies 11/01/2017 $1.50 Platinum Equity
IntraLinks 11/04/2017 $1.00 Siris Capital
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Source: PitchBook 10
Information Technology Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is derived from samples with less than 20 deals. TVPI is as of December 2017.
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Financial Services Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Canada Pension Plan Investment Board, NewStar Financial 12/22/2017 $2.37 Corsair Capital, et al* Caisse de dépôt et placement du Québec, Wells Fargo Insurance 12/04/2017 $2.00 Kohlberg Kravis Roberts, USI Insurance Services Fidelity National Financial, The Blackstone Fidelity & Guaranty Life 11/30/2017 $1.84 Group
*First Eagle Investment Management, Sofina, The Blackstone Group
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Source: PitchBook 12
Financial Services Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. 2012 and 2017 medians are based on samples with less than 20 deals. TVPI is as of December 2017.
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Healthcare Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Kohlberg Kravis Roberts, Walgreens Boots PharMerica 12/07/2017 $0.91 Alliance Young Innovations 10/30/2017 $0.77 Linden Capital Partners, The Jordan Company
ZirMed 11/01/2017 $0.75 Bain Capital, Navicure
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Source: PitchBook 14
Healthcare Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is based on samples with less than 20 deals. TVPI is as of December 2017.
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Materials & Resources Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Tekni-Plex 10/17/2017 $1.50 Genstar Capital
Vantage Specialty Chemicals 10/26/2017 $1.00 H.I.G. Capital, The Jordan Company Encapsys, Sherman Capital Holdings, T. Rowe IPS (California) 11/7/2017 $0.70 Price
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Source: PitchBook 16
Materials & Resources Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. 2002, 2008, 2011, 2012, 2014, 2016 and 2017 medians are based on samples with less than 20 deals. TVPI is as of December 2017.
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Energy Deals
Top Deals 2017-Q4 Company Date Investment Value (Bil) Financial Sponsor Medallion Gathering & Processing 10/30/2017 $1.83 Global Infrastructure Partners
TerraForm Global 12/28/2017 $0.75 Brookfield Asset Management
TerraForm Power (TERP) 10/16/2017 $0.65 Brookfield Asset Management
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Source: PitchBook 18
Energy Performance
TVPI by year of Investment
Note: TVPI is calculated from portfolio company cash flows. TVPI is the total value of assets as a multiple of the amount paid in to the investment. TVPI includes distributed capital and the net asset value of unrealized investments. Median TVPI is based on companies with the same investment year. The 2017 median is based on samples with less than 20 deals. TVPI is as of December 2017.
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Energy Fundraising
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Source: PitchBook 799 9th Street NW, Suite 200 Washington, DC 20001
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