We always find it interesting to see which private equity and venture capital firms are on top of Pitchbook’s Global League Tables.  Here’s a look.

Private Equity Firms

The U.S.

Before looking, which private equity firms would you guess would be on top in the first quarter of 2017?  The firms on top of the most active list may surprise you.

Interestingly, the most active private equity firm in the U.S. was HabourVest Partners, with a first quarter deal count of 12.

Rounding out the top five are Audax Group, ABRY Partners, Kohlberg Kravis Roberts, and TA Associates Management.

Other active firms include CI Capital Partners, The Blackstone Group with 9 and 8 deals respectively. They are followed by The Carlyle Group, Providence Equity Partners, Shore Capital Partners, The Riverside Company, Maranon Capital, and Genstar Capital, all with 7 deals each.

pe most active u.s. Source: Pitchbook

Europe

How does the picture look in Europe?

On top is Bpifrance at 15 deals.  The next closest are Inflexion Private Equity  and Ardian Holding at 8 deals each, Business Growth Fund , LDC, and the Carlyle Group each with  7 deals.

Other top deal makers are in the following table.

pe most active europe Source: Pitchbook

What Does the Exit Picture Look Like?

With the number of deals depicted, how does the exit picture look?  Here’s a look a the top exiting firms across the globe in the first quarter of 2017.

On top is 3i Group with 6 exits.  The other top exiting firms, according the Pitchbook include Epiris, the Blackstone Group, Kohlberg Kravis Roberts, Apollo Global Management, Ardian Holding, and the Riverside Company each with 5.

A host of other exiting firms with 3 or 4 exits is given in the following table.

most active pe Source: Pitchbook

Venture Capital Firms

Now shifting to the venture capital picture.

Most Active in the U.S.

The top venture capital firms in the U.S. include New Enterprise Associates at 24 deals, followed by Greycroft Partners at 19, Kleiner Perkins Caufield & Byers at 17 deals, and Anreessen Horowitz at 15.

Other top investing firms include Y Combinator at 14, Techstars and GV each at 13, Correlation Ventures and Accel have 12, SV Angel, True Ventures, First Round Capital, Foudry Group, and Bessemer Venture Partners are each at 11.

vc active Source: Pitchbook

Venture Capital Deals in Europe

The top venture capital firms in Europe in the first quarter of 2017 include High-Tech Grunderfonds at 15, followed by Index Ventures (UK) at 12, Octopus Ventures and Enterprise Ireland each have 10, Scottish Enterprise at 8, Mercia Technologies at 7, and a host of others at 6 deals.

vc europe Source: Pitchbook

Conclusion

Overall, in a fascinating look at the state of private equity and venture in the U.S. and Europe, Pitchbook’s first quarter of 2017 Global League Tables show some interesting results – worth looking into if you’re at all interested in the private equity and venture capital investing universe.

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Pitchbook, the private equity and venture capital data collection firm, is out with a look at the state of venture capital industry in the United States so far in 2017.  Here’s a look at what we find to be the 4 most interesting findings.

#1 – A Slow Start to the Year

First off, activity and deal volume.  Overall, a slow start to the year.  Deal Value came in at about $71 billion in 2016, a decline from the $79 billion in 2015.  By way of comparison, the current Deal Volume through the first three months of 2017 is $17 billion – or $68 billion on an annualized basis.  Not bad – about what we saw in 2014 – but not real hot either.

On the number of deals closed, the count through the first three months of this year is 1,808 – or 7,232 on an annualized basis – a moderate decline (or what looks like could be a calendar year decline) from the 10,482 in 2015 and the 8,469 we saw in 2016.

Overall, not bad conditions, but certainly not white hot.

1 - Activity and Deal Volume Source: Pitchbook

#2 – Median Deal Size Hasn’t Dropped Off

Although the number of deals and deal volume is off to a slow start in 2017, median deal size hasn’t experienced any drop off yet.  Overall, median deal size is either slightly higher (or hasn’t dropped off).  Hmm.

2 - Median Deal Size Source: Job Search Digest

#3 – A Bad Signal is Coming from Angel and Seed Deals

Of the volume and deal count decline, angel and seed deals are down the most.  Pitchbook’s most recent count has the deal value through the first quarter of 2017 down to $1.5 billion, a fairly moderate decline from the $1.7 billion in the first quarter of 2016.

The deal count is also down, from about 1,200 in the first quarter of 2016 to about 800 in the first quarter of 2017.  The signals should probably give business cycle observers some room for caution.

3 - Agels Source: Pitchbook

#4 – Late Stage Deal Volume is Picking Up

Perhaps surprisingly, although early stage deal volume is slowing down, later stage deal volume is ticking up.

Pitchbook’s accounting of the number of deals closed has the number of late-stage deals coming up in the past few quarter, from about 320 in the third quarter of 2016 to about 380 in the fourth quarter of 2016 and to about 450 in the first quarter of 2017.

Deal Value is also up over the same time period, from $7.4 billion in the fourth quarter of 2016 to about $9.4 billion in the first quarter of 2017.

LateStage Source: Pitchbook

Conclusion

Overall, in a fascinating look at the state of venture capital in the United States, Pitchbook’s data shows some interesting contradictions.  On the whole, deal value and deal counts are declining, with the strongest declines showing up in early stage investments.  On the other hand, later stage venture capital deals are ticking up and median deal value is still going up or staying flat.  We will continue to monitor the data to see how things shape up over the course of the year.

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In the past few quarters, we’ve seen an interesting trend in the venture capital exit markets.

This trend is that there’s a growing number of deals where the exit value is less than the most recent round of post-money valuation.

Some say it might be a disturbing trend – after all, how could it be good when valuations are dipping lower than what investors bought in earlier?  Others are less convinced, seeing the recent movements as just a healthy “reversion to the mean” in the valuation world.

The Data

What exactly are they looking at?  Here’s one view of the data, provided by Pitchbook.  The figure shows the number of companies with an exit value less than the prior financing round’s post-money valuation.  The measure has been on an upward trend since bottoming at 15 in 2008.  Pitchbook’s most recent count is at 37 for 2016 (2 so far in 2017 through March 1, 2017).

pb1 Source: Pitchbook

The Positive Spin on the Trend

Some analysts spin the trend in exit valuations as simply a healthy reversion to normal valuation.  Some point to charts like the following, which show that in recent years there’s been a fairly healthy rise in post-money valuations.  This can’t go on forever, and, some analysts argue, a small cooling right now is better for the long-term valuation picture.

pb2 Source: Pitchbook

The “Negative” Spin on the Trend

A competing interpretation of the valuation trend is that the cooling is only the tip of the iceberg of what’s ahead. Analysts with this view generally see valuations as not just a little out of whack, but in “bubble” territory.

Some may point to charts like the following, which show a potentially disturbing trend in the use of debt in early-stage financing rounds.  The use of debt in early-stage financing rounds has the potential to be damaging to the future health of a company.

Overall, if the early indications for 2017 are anywhere correct, the use of debt-based financing may cool off in 2017 compared to 2016, although the actual amount of debt-based financing is still quite high by historical standards.

pb3 Source: Pitchbook

Conclusion

Overall, recent data suggests some cooling in the venture capital financing market.  An interesting trend that’s emerged recently is that there’s a growing number of companies with an exit valuation lower than their most recently completed post-money financing round.

Whether this trend is a signal of bad things to come for the industry, or just a healthy cooling off, is a matter of intense debate among venture capital investors, economists, owners of early stage companies, and the various other interested parties.

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Looking Back – and then Forward – on the Financial Industry Jobs Picture

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