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Average Number and Value of Buyouts: Top 10 vs Top 250 Private Equity Firms

by Jonathan Parker

  • 02 Jun 2011
  • PE

In this month’s edition of Spotlight, we focused on the top 10 private equity firms (in terms of funds raised) and analysed their influence on the private equity market as a whole.

Our research revealed that in a comparison to the top 250 private equity firms, the top 10 firms have recorded a higher average number of buyout deals per year than their counterparts in each of the last five years. Last year, for example, the top 10 firms completed an average 23 deals each, in contrast to the 13 deals completed on average for each top 250 firm.

This trend is mirrored in the value of private equity-backed buyouts, although the distinction between the two groups is far greater in value than in number. The average value of deals involving top 10 private equity firms was typically more than double the value of deals involving the top 250, with the most notable difference witnessed during the buyout boom-era. During this peak era, the top 10 firms had an average deal size of over $4bn, in comparison to the average for the top 250 of less than $750mn. This is to be expected, since the top 10 have raised larger funds and so will have the scope to invest in larger deals, while still retaining the ability to participate in mid- and small-market deals.

Despite this, the contrast between top 10 and top 250 firms has diminished somewhat since the onset of the financial crisis and the decline in popularity of mega-market funds. Although the average number of deals completed by the top 10 firms firms fell from 27 in 2006 to 15 in 2008, the fall in the average value of these deals was more dramatic, dropping from $4.2 billion to $597 million in 2008 before rebounding to $962mn in 2011 to date. The average deal size for the top 250 has also declined from the boom-period peak, currently standing at $484mn per deal.

In addition to the analysis of basic trends in value and number of buyouts by top 10 and top 250 private equity firms since 2006, the latest edition of Spotlight includes a ranking of the top 10 firms’ deal activity, deeper analysis of the type of deal and regional focus for the top 10 and top 250 firms, as well as details on recent private-equity backed buyouts and exits. To view this month’s edition of Spotlight, and to subscribe to future issues, please click here.

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