PE deal making in 2021 set an all-time high. Overall deal volume increased by 35 percent from the previous year while deal value jumped by 77 percent on the back of many high-value transactions.
Among other factors, M&A was driven by ample dry powder, ultra-low interest rates, and possible hikes to capital gains and corporate taxes which accelerated deals before policy implementation.
A deeper look at these PE trends reveals key characteristics of the market last year.
- Domestic deals still made up the bulk of PE transactions (72 percent) and outbound deals increased slightly compared to 2020
- The technology, media, & telecom and industrial manufacturing sectors led in deal value—together constituting 60 percent of PE’s total—primarily driven by the pursuit of digital transformation and tech capabilities
- The healthcare & life sciences and consumer & retail sectors registered the highest growth rate in deal value—132 percent and 90 percent, respectively
- SPACs continued to play an increasing role in PE funds’ exit strategy compared to traditional IPOs
- PE firms increasingly incorporated ESG-driven investments into their portfolios
Looking ahead to 2022, abundant liquidity and dry powder are likely to drive continued high levels of PE M&A activity. But growth may cool somewhat due to a more hawkish monetary policy, inflation, high valuation multiples, and other headwinds. Overall deal appetite remains strong. According to a yearend KPMG survey, 65 percent of senior executive respondents plan to increase their deal activity in 2022.
PE Deal Volume and Deal Value ($ Billion)
PE Deal Volume and Deal Value
Our 2021 report unpacks these trends and what’s ahead—including deep dives on three topics:
Download the full report to uncover what is happening in PE, how deals are being done today—and why.
