Survey: Private Equity’s Inward Focus Is Out

Private equity is done licking its wounds. The industry’s near-exclusive focus on existing portfolio companies, a trend that marked 2009, is officially over, according to a survey from investment bank McGladrey Capital Markets. The company surveyed 50 private equity groups today at its annual Private Equity Group symposium.

Said Hector Cuellar, president of McGladrey Capital Markets, “Last year at this time, private equity focus was strongly inward, looking closely at the performance of their portfolio companies.  As valuations come up to levels that are in line with expectations, the focus seems to be trending outwards at exits, new platforms, or add-ons.”

Strong majorities of those surveyed said they did not* plan to fundraise in 2010 (60%) and 76.4% said they expected deal volume to increase by 25% in 2010.

Respondents were split on whether valuation multiples would increase or stay the same in 2010, and a majority said they planned to do between three and five deals this year.

View the entire survey here.

Correction: A prior version of this story stated that 60% of those surveyed said they did plan to fundraise in 2010, when the opposite is the case.