Private Equity’s High-Multiple Challenge

While private equity has been generating record deal value over the past five years, the industry hasn’t been able to keep pace with investor demand, resulting in a growing mountain of global dry powder. One reason: Heavy competition for assets and a flood of capital—both debt and equity—have driven price multiples to historic highs, making it hard to find attractive targets. Funds are definitely finding ways to put money to work, but high prices present a persistent challenge.

Bain partner Hugh MacArthur is a director in the firm’s Boston office and head of Bain’s Global Private Equity practice.

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