The independent surveys are all in. Depending upon which one you read, 2015 was either a great or a subpar year for the private equity deal market in the U.S. Perhaps it was both depending upon whether you were a seller or a buyer. In any event, as the year developed the challenges for private equity sponsors looking to deploy capital increased, and those challenges have continued into the start of 2016. Those challenges include high valuations for assets, a shaky leveraged finance market (particularly for the lower-rated credits and for the more junior traches of debt), a scarcity of good assets to buy and strong competition from strategics for the available good assets.
Some of the strategies that we saw in 2015 (and expect to continue to see in 2016) by sponsors seeking to deploy capital in this environment include the following:
We are looking forward to what 2016 brings to the private equity deal market and will report back to you on any interesting developments.