As Carlyle Group Inc. seeks to raise $27 billion for its next flagship fund, in what would be the industry’s largest-ever private equity pool, it’s another sign that 2021 is the year of the mega deal. Bigger funds translate into bigger deals, if only because it’s tough to put that much money to work on slews of smaller deals.
“Are PE shops willing and able to do much larger deals?,” asked Carlyle managing partner Joe Bress on a panel about megal deals during our Rising Stars of Private Equity SPEAK event last week. Clearly, the answer for Carlyle is yes. “And are there deals to do? The environment for PE is pretty conducive.” In June, Carlyle, along with Blackstone and Hellman & Friedman announced plans to buy medical supply company Medline Industries Inc. for more than $30 billion in one of the largest PE deals ever done.
Carlyle is not without competition in chasing large deals. Hellman & Friedman recently raised $24.4 billion for its biggest fund yet.”I think the need to deploy is going to result in big LBO deals, but also bein g creative in investing that in other ways.” said Apollo partner Reed Rayman on the panel.
“The opportunities are massive,” addded Thoma Bravo partner Chip Virnig. “You get more big deals that become eligible to become big deals every year. It’s not like big deals are going to go away because there’s going to be more and more of a pipeline of big deals.”
I can’t wait to see which mega deal will be announced next. Are you working on a big deal? Tell me about it at [email protected].
– Demitri Diakantonis