Key Takeaways
- • Global buyout deal value reached a record $1.1 trillion in 2021, doubling 2020's $577 billion and surpassing the prior peak of $804 billion set in 2006, according to Bain & Company's 2022 Global Private Equity Report.
- • Average buyout deal size exceeded $1 billion for the first time, rising 57% year over year, while deal count rose about 16% to nearly 4,300 deals.
- • Public-to-private transactions absorbed $469 billion globally in 2021, a 57% one-year increase, and were largely responsible for the record value total.
- • Growth equity and venture AUM reached 82% of the buyout total by 2021, having grown at roughly twice the rate of buyout over the past decade.
- • Global dry powder hit a record $3.4 trillion, with about $1 trillion held in buyout funds, while rising inflation and interest rates pose risks to returns in 2022 and beyond.
Summary
Private equity set new records in 2021, according to Bain & Company. Buyout deal value and exits reached historic highs, and general partners had the second-best fundraising year in the industry's history, capping a five-year run that netted $1.8 trillion in new buyout capital. Distributions to limited partners increased, and private equity continued to outperform other asset classes. The report attributes much of the momentum to trillions of dollars in pandemic-era monetary stimulus, which kept debt for buyouts abundant and cheap.
Buyout value of $1.1 trillion more than doubled 2020's $577 billion and exceeded the 2006 record of $804 billion. North America accounted for $537 billion, matching the 2020 global total on its own. Deal size drove the increase: the number of deals rose to nearly 4,300, but the number of $1 billion-plus deals roughly doubled and average deal size passed $1 billion for the first time. The 10 largest deals, including a more than $30 billion investment in Medline Industries led by Blackstone, Carlyle, Hellman & Friedman and GIC, accounted for 18% of total value.
Public-to-private deals were a major driver, totaling $469 billion globally. Bain notes that the last comparable surge in large take-privates occurred in 2006-07, when deals often proved overpriced and produced weak returns, with a multiple of invested capital of roughly 1.5x. Bain says 2021 P2P multiples averaged 19.3 times EV/EBITDA, or 1.6 times the market average, versus 12.6 times in 2007. However, 2021 deals were considerably smaller, with the largest being McAfee at $15.4 billion including debt, and were typically led by one or two sector-specialist buyers such as Thoma Bravo's acquisition of Proofpoint.
Bain also highlights a broader shift toward specialization, with technology and tech-enabled funds dominating buyout strategies and growth equity, infrastructure and secondaries expanding rapidly. Bain cautions that rising inflation and interest rates could temper the multiple expansion that has supported private equity returns, requiring general partners to develop new value-creation capabilities.
Buyout value of $1.1 trillion more than doubled 2020's $577 billion and exceeded the 2006 record of $804 billion. North America accounted for $537 billion, matching the 2020 global total on its own. Deal size drove the increase: the number of deals rose to nearly 4,300, but the number of $1 billion-plus deals roughly doubled and average deal size passed $1 billion for the first time. The 10 largest deals, including a more than $30 billion investment in Medline Industries led by Blackstone, Carlyle, Hellman & Friedman and GIC, accounted for 18% of total value.
Public-to-private deals were a major driver, totaling $469 billion globally. Bain notes that the last comparable surge in large take-privates occurred in 2006-07, when deals often proved overpriced and produced weak returns, with a multiple of invested capital of roughly 1.5x. Bain says 2021 P2P multiples averaged 19.3 times EV/EBITDA, or 1.6 times the market average, versus 12.6 times in 2007. However, 2021 deals were considerably smaller, with the largest being McAfee at $15.4 billion including debt, and were typically led by one or two sector-specialist buyers such as Thoma Bravo's acquisition of Proofpoint.
Bain also highlights a broader shift toward specialization, with technology and tech-enabled funds dominating buyout strategies and growth equity, infrastructure and secondaries expanding rapidly. Bain cautions that rising inflation and interest rates could temper the multiple expansion that has supported private equity returns, requiring general partners to develop new value-creation capabilities.
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