Private equity fund managers expect to close more new deals in the coming year than they did during the past 12 months, according to the second annual PErspective study by BDO USA, LLP.
Almost half (49 per cent) of respondents expect to close three or more deals during the next 12 months compared with only 31 per cent who reported closing three or more deals during the past year. More specifically, nearly two-fifths (38 per cent) of respondents expect to close between three and five new deals in the coming year, while only 16 per cent having reported closing that number of new deals during the past 12 months.
However, private equity professionals do not expect deal flow to bounce back to pre-recession levels anytime soon. According to BDO’s PErspective study, the majority (69 per cent) of respondents do not expect deal flow volume to return to 2007 highs until 2012 or later. Another 18 per cent believe deal flow volume will never return to 2007 levels indicating that those were “bubbly times.”
“We’ve seen a steady increase in private equity activity in 2010 and while private equity professionals are not expecting a sudden boom, they are optimistic that this positive momentum will continue in the new year,” says Lee Duran (pictured), Partner and Private Equity Practice Leader at BDO. “With the increasing availability of debt and appetite for large deals returning, it’s likely that funds will be looking for not only more, but larger deals in 2011.”
