Midmarket M&A Analysis: Private Equity & Family Offices

Private equity investors and strategic buyers are enthusiastic about 2014. Of the U.S. executives polled recently by EY Americas Transaction Advisory Services, 41 % said they expect to pursue at least one acquisition in 2014, compared with only 23 % polled at the end of 2012.  Uncertainty in regulation remains one of the biggest challenges facing PE firms. Despite this the PE market is growing and private equity activity has begun to make a comeback. Recently released GF data shows valuations acquisitions valued between $25-50m increased to 6.9x EBITDA in 2013.

Family offices will become more accessible for investment opportunities in 2014. Numerous family offices have begun directly investing in or purchasing private companies over the last few years. Family offices have improved capabilities of directly investing, thus allowing them to bypass some of the drawbacks that come from investing via PE funds – such as fees, illiquidity and a lack of control. This trend is expected to continue in 2014, with 2013 seeing a 50% increase in the number of family offices actively pursuing private company investment opportunities.

This post is part of a series addressing current and expected viewpoints on M&A from across a number of professionally relevant sources. Read parts one, two and three of our Midmarket M&A Analysis. 

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