A strong recovery in economic activity, an extended period of monetary policy focused on lowering long-term interest rates, and record levels of private equity dry powder have all converged to create the hottest period of private equity (PE) activity on record. Global buyout-focused PE firms invested more capital in 2021 than in any year previously, and PE as an asset class had its second-best fundraising year ever (behind 2019), according to data shown here from a recent report released by global PE firm Bain & Co.
Other metrics from the report illustrate how broad the boom in deal activity has been: global M&A deal value exploded to $5.9 trillion last year, its highest level since 2005 by far. Buyout-backed exit value also topped the charts, at $957 billion. On the fundraising side, the number of new funds closed (490) also set a record in the 2005+ time period.
The engine of global private equity was white hot in 2021, as evidenced by a wide range of data. Are private markets bound to cool off? Are private company valuations entering bubbly territory?
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