Private equity firm managers anticipate a greater number of acquisition deals for the rest of this year, in a dramatic turnaround from their sentiments last November.
A survey of 110 private equity fund managers in the U.S., released Tuesday by accounting firm EisnerAmper, found private equity executives forecasting greater activity for new acquisitions, at 82 percent, compared to 76 percent when they were surveyed last November. PE executives also report they are spending more time on fundraising, at 53 percent, compared to 44 percent last November.
Private equity executives also predict sales or dispositions will be higher for the first half of 2012.
The report shows a significant increase, since November 2011, in the involvement of fund teams with financial management at portfolio companies, with an increase from 18 to 39 percent in terms of active involvement. Operational management increased in activity from 10 to 38 percent.
“Whether it is an M&A strategy or increased attention to the composition of their boards, PE executives are immersed in the day-to-day,” said EisnerAmper chairman Howard Cohen.
The latest report confirms a trend seen in previous editions, in which managers view limited partners as having an ever-increasing concern about due diligence, fund terms, management fees and fair value. For the first time, the survey asked about the limited partner’s interest in both transparency and the fund management’s ability to execute, with more than 90 percent of general partners saying their limited partners were highly interested in both topics.
In terms of employment, 56 percent of the survey respondents project hiring will remain the same, while 37 percent anticipate it will increase. Fully half the survey respondents said they would be hiring financial professionals, and 55 percent indicated they would be hiring to improve operations.
