Deal value for announced global private equity (PE) buyouts totalled US$282 billion in 2015, just about 5 per cent more than in 2014, a Bain & Company report said on Friday.
This comes as PE firms face intense pressure from continued competition and "ferocious deal-making", the consultancy said. Investors in PEs are also looking to concentrate their investments in a smaller number of top performing funds, Bain & Company observed.
"It used to be that you could take the deal model, trim it by 15 per cent and still wind up with a reasonable return," said Suvir Varma, head of Bain's Asia Pacific private equity practice, in a media statement. "Today, the need to transform the value of the assets is more acute than ever - sometimes you need to get the year five number in year three to realise an attractive payoff."
Deals valued between US$5 billion and US$10 billion saw an uptick in 2015; deal count fell 14 per cent.
The amount of new buyout funds stood at US$175 billion, down 11 per cent from 2014. But the percentage of funds that hit or exceeded their fundraising targets was higher in 2015 than at any time since the pre-crisis boom of 2007.