US Middle Market Fundraising On Track to Meet Record Levels in 2018

Last year was a record year for private equity fundraising in the US. This activity was driven by some mega-funds that allowed firms to bring in more cash than in any year since the financial crisis. In 2018, there are fewer of those mega-fund vehicles, and overall fundraising figures are down. However, in the middle market—defined as vehicles between $100 million and $5 billion—American firms are still thriving. The funds may be fewer. But they’re definitely larger. Through the end of 3Q, investors had raised more than $88 billion for middle-market funds, per PitchBook’s 3Q 2018 US PE Middle Market report, on pace for the most of any year in the past decade.

What Does This Mean for Middle Market Businesses?

Record level of capital in middle market funds means M&A deal volumes will continue to be strong and likely growing into 2019. All of this capital will need to be deployed, meaning investors will be looking hard in the middle market for platform and add-on investments for their portfolios. So, if you have been considering growth capital or of selling your business altogether, now is the time.

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