Buyout boom: global private equity deals surge

Led by a buyout boom in the US and Asia, global private equity deal-doing surged 43 percent in 2003 while fundraising dropped 12 percent, according to a survey from PricewaterhouseCoopers and 3i.

In 2003, private equity and venture capital investment around the world surged 43 percent to $155 billion (€128 billion), up from 2002’s $102 billion, according to a joint study released by private equity firm 3i and consultant PricewaterhouseCoopers.

 

By contrast, global fundraising fell 12 percent to $82 billion (€67.7 billion) from $93 billion in 2002.

 

The survey, titled ‘Global Private Equity 2004,’ is the fifth such joint research effort from the two organisations.

 

Globally, buyout investment rose 83 percent to $118 billion, attributed in part to a 454 percent buyout surge in Asia, which saw $8.9 billion worth of these deals done in 2003. But the spate of megadeals in the US was the prime contributor to the 2003 increase.

 

Last year’s global buyout total was $65 billion, according to the study.

 

In North America, total private equity investment increased 67 percent to $108.2 billion, up from the previous year’s $64.6 billion. Of the 2003 total, $89 billion was invested in buyouts, a 114 percent increase over 2002, which saw $41 billion in buyouts. According to the survey, 2003 saw the greatest North American buyout activity in 15 years.

 

Venture investment activity in North America edged up 6 percent to $27.5 billion.

 

Private equity funds raised in North America fell to $45.3 billion in 2003, down from 2002’s $57 billion and well below the $180.5 billion raised in 2000, according to the survey.

 

In Europe, a second quarter investment surge saw 2003 end the year with a total of $27.1 billion (€22.4 billion) invested in private equity deals. This was down from the $32.3 billion invested in 2002.

 

Fundraising in Europe held steady at $32.5 billion (€26.8 billion), an immaterial increase over 2002’s $32.4 billion.

 

The biggest deal surge by percentage was in Asia, where private equity investment saw a 91 percent rise to $17.5 billion. Fundraising in the region increased 11 percent to $3 billion.