Whether 2019 will follow 2018 as a record year for U.S. middle market buyout activity, or whether the decline in activity during the second half of 2018 will continue, is front and center in the minds of market participants. At the risk of stating the obvious, the answer to this question is dependent largely upon whether credit conditions remain favorable and the expansion of the domestic economy continues through 2019 to become the longest in U.S. post-war history, or whether the economic train is derailed by factors such as geopolitical tensions, concerns about record sovereign debt, uncertainty about the 2020 elections, and a reversion to the mean of interest rates.
This quarter’s edition looks at deal activity, exit volume, valuations, and fundraising trends. We also take a closer look at the much talked about Qualified Opportunity Zones and how certain private equity funds and their investors may be able take advantage of the federal tax benefits under the new qualified opportunity zone program. The extent to which Qualified Opportunity Zones will be of value to (corporate) private equity funds will be dependent on the regulations which have yet to be promulgated.
