Private Equity Activity Down?

Private equity has been the hot business story on Q1, with everything from Forbes cover stories to Newsweek columns to an upcoming feature on female PE pros in the inaugural issue of Conde Nast Portfolio. I’ve even covered it from time to time (i.e., Mondays through Fridays). But here’s a dirty little secret: Private equity deals were down in Q1.

Final data won’t be available until the quarter formally ends on Friday, but preliminary numbers show that buyout firms invested fewer dollars in Q1 2007 than in Q4 2006. This decline holds true for disclosed values of both closed deals and combined closed/pending deal figures. Moreover, private equity has actually lost global M&A market share, as total M&A volume is expected to top $1 trillion for the second consecutive quarter (first time that’s happened since Q4 ’99 and Q1 ’00).

There are some caveats to what I just reported – including an apparent increase of middle-market deals with undisclosed values – but the main data trend is nonetheless at odds with the consensus storyline.