What Industries Do Private Equity Firms Invest In?

By Generational Equity


And the answer, based on PitchBook data, is quite simple: All of them!

As the colorful chart above illustrates, the reality is for private equity firms that focus on middle-market companies, there is a wide range of industries that they invest in even though the business press tends to focus on mega deals in “sexy” industries. Some of you may be surprised to learn this and may question the data.

PitchBook is the leading research firm specializing in M&A activity of equity firms throughout the world. Their data is second to none and can be trusted to be accurate. The data above is from their recently released 2nd Quarter 2015 Private Equity Middle Market Report.

Most business owners are oblivious to a lot of private equity movement in their industries. Quite often when we present our M&A research to potential clients they are pleasantly surprised to learn that equity firms, most often via their platform companies, are quite active in their space. Most of these firms fly under the radar screen because they fear being inundated by acquisition targets if they widely publicize their activity. There is also competitive issues that raise their ugly heads if they make too much noise about consolidating a fragmented industry.

The important takeaway from this is that when you begin your buyer search (assuming that you are not going to hire an M&A advisory firm like Generational Equity) be sure to do research and find out if any equity firms are present in your industry. This is a critical step in your buyer list development and should be done in conjunction with your research on other buyer types (i.e. public and private corporate strategics, offshore buyers, high net worth individuals, family offices, etc.). Unfortunately this critical step is often overlooked or not researched thoroughly by sellers. Ultimately, though, it is perhaps the most important part of your pre-marketing work and should not be undervalued.

If you would like to learn more about how to find, contact, and negotiate with premium buyers like these, I recommend that you set aside a day and attend a Generational Equity M&A conference. We hold these throughout North America and they are complimentary and highly educational. They are designed solely for business owners and will allow you in a few hours time to significantly enhance your understanding of the M&A process.

To learn where our next seminar in your area will be, please call us at 972-232-1121 or fill out a contact form. One of our senior business advisors will be able to provide you with more information about our meetings and the typical agenda.

Carl Doerksen is the Director of Corporate Development at Generational Equity.

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