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Director of US PE Research, PitchBook
7 quotes from 1 episode on Private Equity Funcast, each with a timestamped link to the source.
Steven Buibish said evergreen funds and high valuations are reshaping private equity dealmaking. Steven Buibish noted that evergreen fund assets doubled to $100 billion last year and could reach $200 billion next year.
Large evergreen funds managed by firms like KKRS hold up to $20 billion and continue to expand rapidly.
“Some of Black Sun's funds are north of $25 billion. KKRS are close to $20 billion. These are large pools of capital that are growing at a pretty good clip.”
From Evergreen Funds to Double to $200B, Reshaping PE Capital Flow
Expanding capital pools will noticeably shift how the private equity market functions within a year.
“I think we'll be here in a year and be like, 'Wow, that's that's really starting to impact things uh and and and how the market function.'”
From Evergreen Funds to Double to $200B, Reshaping PE Capital Flow
Evergreen fund assets doubled from $50 billion to $100 billion last year and could hit $200 billion next year. Steven Buibish stated that 401k target date funds will direct more money into these vehicles.
“…as you get retirement uh 401k target date fund you'll get more assets coming into the private equity through these evergreen vehicles.”
From Evergreen Funds to Double to $200B, Reshaping PE Capital Flow
“I think that space is just primed to take off. I think you'll see assets. We saw them double from 50 billion to 100 billion last year. I wouldn't be shocked as they're at 200 billion next year.”
From Evergreen Funds to Double to $200B, Reshaping PE Capital Flow
Only high quality assets are trading while the rest of the market remains stuck. Steven Buibish said high purchase prices force buyers to fund deals with more equity, making buyout math difficult.
“…you’re seeing in the prices is that it’s only those high quality assets that are changing hands and everything else is sort of stuck.”
“…the math for a leveraged buyout is is much more difficult when you have to contribute that much equity at this high of prices.”
Middle market platform building drives high transaction volume. Steven Buibish said add-ons account for 75% of all private equity deals.
“By account, 75% of deals in private equity total are add-ons. And a lot of those happen in the middle market when you're when you're building platforms.”
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