PitchBook released its quarterly middle market report last week. While deal flow maintained a robust pace in Q2, fundraising is decelerating for middle market funds. We came away with the following takeaways:
Middle market funds may post a 15% decline in full-year fundraising compared with 2018 if the current pace is sustained, according to PitchBook data.
First-time sponsors raised three funds in the first half, compared with 19 such appearances in 2018.
Middle market fund sizes continue to drift higher, with the median middle market buyout fund size reaching a new high of $612.4 million, up from $554.4 million in 2018.
Large funds of $1.0 billion or more made up 77% of 1H 2019 middle market dollar-weighted fundraising (33% by fund count). Prior to 2018, large funds typically accounted for 60% of yearly capital raising (20% by fund count).
No middle market restructuring or turnaround funds came to market in the first half.
Exit activity appeared to slow meaningfully in the first half, which may present a headwind to fundraising in 2020 if the trend is sustained.
The quarterly report with supporting data is available from PitchBook here.
