Private equity spends record amounts in October

The total value of global private equity deals conducted in October marked a 12-month high, however the record is contrasted by a 12-month low in total deal volume, according to data provider Zephyr.

The private equity industry posted $32.5 billion worth of deals in October 2010, a 12-month high driven by transactions that exceeded $1 billion, according to data provider Zephyr. The figure nearly doubles the $17 billion worth of deals reported in September, and significantly outpaces the $23 billion worth of deals completed in October 2009.

Notable deals valued at more than $1 billion completed in October include Bain Capital's $1.8 billion take-private of children's clothing giant Gymboree and Carlyle's $3.9 billion take-private of CommScope, a maker of infrastructure for communications networks.

The uptick in value was made despite deal volume hitting a 12-month low, with 253 deals in October, down from the 269 posted in September, and lower than the 280 recorded in October 2009.

Looking forward, a more stable world economy may lead to rising risk appetite, which in turn opens the way for higher private equity activity, noted a recent outlook report from banking group SEB.

The report stated an increase in leverage availability and attractive valuations will further drive investment activity, however, concerns about global demand and stricter conditions demanded by lenders could handicap future deal flow.