PE activity saw a healthy rebound in Q3, which was expected, according to PitchBook’s just-released Q3 Middle Market Report. An estimated $115.6 billion was invested last quarter, a 66% jump over Q2’s disastrous $69.6 billion tally. Volume also reversed course, with 711 transactions in Q3 and a 50% increase over the second quarter. All told, 2020 value has combined for about $295 billion against 2019 totals of $488 billion. Volume lags even further behind, with 1,933 deals through Q3 versus 3,436 done last year.
Though it’s a down year all around, the middle market has actually seen an increase in attention relative to other parts of the market. Just over 70% of all US deals have been done in the middle market this year, more than the 67.6% ratio we saw in 2019. On the other hand, middle market deals are on pace to be much smaller this year. The median deal size fell to $157 million through Q3, down significantly from 2019’s $200 million median.
Latest news
Share of PE middle-market deal count by backing type
Add-ons remain the workhorse for middle-market deployment, accounting for 67. 1% of all middle-market transactions YTD, in line with activity seen in recent years.
Software deal share falls in middle markets, rises in large caps
In Q3’26 software’s share of total deals fell in both the Lower Middle Market (to 7%) and Upper Middle Market (to 9%), while Large Cap saw a modest uptick in share to 8%.
Secondary loan prices stabilize following steep declines
Secondary loan prices came under significant pressure through September and October, with the Bloomberg U.S. Leveraged Loan Index declining 119…