Private equity deals tumble 20% in 2020’s first half – PitchBook

U.S. private equity transactions fell nearly 20% in deal value to $326.7 billion on 2,173 deals in the first six months of 2020 from the year-ago period, according a PitchBook report.

Many private equity managers pulled out of previously agreed deals, with some invoking clauses for material adverse changes, the July 10 report said.

U.S. private equity exits also dropped by 70% to 392 transactions worth a combined $134.8 billion. PE firms marked down portfolio companies and chose to hold investments rather than sell them, the report said.

Domestic private equity firms raised $101.6 billion in 101 funds in the first half of 2020. By comparison, U.S. private equity funds raised a record $314.1 billion in 320 funds during all of 2019, Preqin data shows.

Separately, a study by consulting firm Willis Towers Watson showed that despite a drop in exit transactions in the first half of 2020, there is little evidence of forced exits.

Some 87% of survey respondents said their holdings were unlikely to breach covenants. At the same time, a small portion of respondents — 13% — said holdings were either close to breaching , or likely to breach, covenants in two to three months.

Willis Towers Watson surveyed executives at 36 private equity funds in April.