2021 set to be a dynamic year for private equity: Report

2021 set to be a dynamic year for private equity: Report

Private equity activity ground to a sudden halt in the second quarter of 2020 as the reality of Covid-19 became apparent. But the industry quickly regained its footing and demonstrated an extreme resilience. Deal and exit value snapped back vigorously in the third quarter, ending the year 8% higher compared to 2019 levels. By all indications, PE weathered 2020's perfect storm without taking a hit to returns, as valuations remained very high. In terms of putting large amounts of money to work, the year's second half ended up being as strong as any two-quarter run in recent memory.



One number that stood out was the number of deals transacted by PE firms, which was down by 24% (about 1,000 deals) in 2020 from recent levels meaning that total investment value was supported by larger deals. With high level of dry powder and robust credit markets, 2021 deal markets promise to be incredibly busy as investors seek to make up for lost time. Looking at January 2021 data, deal value is 184% higher than the averages seen for that given month in the past five years.



However, high valuations also mean that there is little room for error. Soaring asset