Overall M&A deal sizes have gotten huge in recent quarters, but US private equity firms mostly missing out.
Case in point: last year’s largest leveraged buyout went to a foreign private equity firm, which reached into the US to acquire PetSmart.
One rason: in 2013, the Federal Reserve and Treasury Department formalized leveraged lending guidelines.
Many US private equity pros complain these guidelines put them at a big disadvantage to corporate bidders.
In the time since they have been ‘regulated out’ of big deals, private equity firms have been taking on big real estate transactions, which are viewed as less risky — but along with that, comes a lower likelihood out outsized returns.
Here’s a graphic provided by PitchBook, which shows how private equity deals are getting outpaced by corporate M&A:
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