PE is flat, M&As and IPOs are down, but muni-bonds look good

BVWireIssue #112-2
January 11, 2012

A current roundup of year-end 2011 market reports reveals the following:

  • This past year trailed 2010 in deal activity for private equity (PE) investment, says a new PitchBook update, “but it was still a marked improvement over 2009 and left the industry poised for strong future activity.” In 2011, 1,630 PE deals were completed in the U.S., down 10% from the 1,807 deals in 2010, but up 19% from the 1,375 deals in 2009. In 2011. PE transactions invested over $144 billion in U.S. companies; during the same time, 415 PE deals saw an exit (through a sale or IPO of a portfolio company), the fourth-highest yearly total. For more analysis of the PE world, PitchBook will release its annual “Private Equity Breakdown” (2012) next week.

  • Despite a flurry of sales in the last quarter, only 52 venture-backed companies went public during 2011, a 31% decline in IPO volume compared to 2010, says a new report from Thomson Reuters and the National Venture Capital Association (NVCA). IPOs raised nearly $2.6 billion in cash in 4Q2011—or nearly five times the amount raised in the previous quarter, but a 34% drop from 4Q2010.

  • Merger and acquisition activity also fell by 34% in 2011, according to the Reuters/NCVA report. Other sources, such as the mergermarket M&A Roundup for Year-end 2011, report a slight uptick (2.5%) in global M&A activity along with a strong year-end surge of domestic M&A deals.

  • Municipal bonds returned an average 10% in 2011, outpacing equities and other asset classes, says a year-end survey by InvestmentNews (free registration). The muni-bond market may continue to do well in the coming year, assuming the continued suppression of interest rates as well as economic growth.
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