Private Equity Markets

Private equity transaction activity in North America, and globally, increased in the latter half of 2010 and into the first half of 2011. In Canada, private equity transaction and dollar volumes grew in the 2010 calendar year for the first time since 2007. This increase in Canadian activity was consistent with private equity developments in the U.S. and around the world. Globally, unfunded commitments for buyout funds continued to decline, falling over 20% from their peak in 2009 although the amounts remain well above pre-recession levels. Also, emerging market private equity deal volume rose 11% in the first half of 2011, after a sharp pull-back in 2010.

In the U.S., the first half of 2011 remained strong for private equity backed initial public offerings; however, the dramatic sell off of public markets in August led to many withdrawn and postponed transactions. Should markets continue to exhibit high levels of volatility in the future, private equity investors could face longer hold periods for companies in their portfolios.

On the fund-raising side, the overall environment remained challenging for private equity managers coming to market with new funds over the last 12 months. This represents a positive factor for investors such as ATRF who can advocate for improved fund terms and gain entry to previously difficult-to-access funds.