Middle-market PE activity in the US was strong through the first half of the year, according to PitchBook's recent US PE Middle Market Report. Both deal value and overall volume are on pace to match or exceed last year's numbers, both of which were records. The back half of the year has been strong historically, and we anticipate the same case in 2019.
One metric that's set for a decrease is fundraising. Around $41 billion worth of US middle-market funds have closed through the first half of the year, which is on pace to underperform 2018's $97 billion in fundraising. What's more, the capital raised in 2019 is distributed across just 39 funds, well off pace to reach the 111 funds raised last year and the 138 recorded in 2017.
Unless something changes, the middle market might see fewer than 100 PE funds close on an annual basis for the first time since 2012. Indicative of the slowdown, the number of first-time middle-market fundraises dropped to just three in 1H 2019. Last year there were 19 such rookie funds, a stark contrast to the current fundraising environment. That said, the string of big fundraising years going back to 2016 means more than enough money is floating around, and one down year likely won't have much impact.
Featured image via Texina/iStock/Getty Images Plus.
This column originally appeared in The Lead Left.
Read more about PE middle-market fundraising and deal activity in our recent report.