Private Equity Shrinkage in 2008

Private equity in 2008 was a shrinking slice of a shrinking M&A pie, according to preliminary data from Thomson Reuters (publisher of peHUB).

Private equity firms have sponsored approximately $233 billion worth of deals so far this year, which represents nearly a 70% decrease in volume from last year’s $765 billion tally. It’s also the lowest annual total since 2003, when just $140 billion worth of PE-sponsored deals were transacted.

For contrast, the global M&A market has “only” shrunk by a 29.8% rate between 2007 and 2008 — meaning the private equity’s piece of the action has dropped from around 18.35% to around 8 percent.

It’s important to note that deal volume is not necessarily indicative of a market’s health or infirmity, as a goodly portion of last year’s $765 billion was spent foolishly. But still, it’s striking how much faster private equity has descended than it ascended — and its decreased percentage of global M&A certainly reflects some significant loss of influence.

If you’d like a quick look at the topline data, get it here. The official data will be available on Friday.