It’s Not About Sector

I just got off the phone with a reporter, who wanted some comments for a piece she’s writing about the private equity market, post-credit crunch. So we talked debt availability, debt terms, deal sizes and return expectations. Then she asked the following question: “What specific areas are private equity firms most likely to invest in right now?”

I don’t blame her for asking. It’s the standard question reporters ask investors (or those of us who cover investors). But the truth is that it’s no longer operative in the private equity market. There are of course certain funds dedicated to tech/energy/consumer/etc., but the vast majority are now generalists, vis-a-vis industry sector (and increasingly vis-a-vis geography). 

Need proof? Well, it’s too early to have conclusive data, but take a look at the 25 buyout deals announced so far this week. Tell me if you can find a pattern, because I sure can’t:

Pizza franchise chain
Mobile services operator (India)
Iron castings manufacturer
Construction materials
Cable & harness manufacturing
Medical devices
Auto finance
Energy project
Post-secondary education
Specialty trailers
Trade show organizer
HR outsourcing
Specialty chemicals
Oil & gas
Boutique investment bank
Event organizer
Parking lot operator (Japan)
Medical devices
Industrial coils