, there was a slump in transactions due to the pandemic, but the largest PE managers ‘sprinted to the finish’ in the second half of 2020. PE firms closed a total of $592bn in deal value in 2020, up 8% from 2019 and 7% higher than the five-year average of $555bn. The percentage of debt used in buyout transactions accelerated in 2020; nearly 80% of transactions were leveraged at more than six times earnings before interest, taxes, depreciation and amortisation.
2020 was also a year in which special purpose acquisition companies (SPACs) garnered intense interest from investors. Many SPACs are sponsored by PE, and they raised more than $40bn last year for the purpose of mergers. In 2020, 248 SPACs raised a total of $83bn, up from a mere 19 SPACs raising less than $20bn the year before.
With these dynamics in mind, it is rather auspicious timing to host these two webinars.
“How could this be an economic equilibrium? […] A combination of features – misleading performance information that was presented to investors, the fees being higher than those recorded in any other investment vehicles, the high transaction costs and the many layers of potential agency conflicts – suggested the outcome was unlikely to be positive for investors […and] some people have become extraordinarily rich. That wealth will not return to pensioners, universities, etc.”
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