Prepared for Will M. | Delivered September 25, 2019
PE Deal Sourcing Strategies
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To learn more about innovative strategies for sourcing deals / investments in the private equity space for background research.
The average PE investor reviews
at least 80 investment opportunities
before finally making a single investment.
"It can take a team of
3 institutional investors
up to a year to capture a single transaction."
An in-house team is what the
top 10% of PE firms
go for. According to a research, there are
between 0.75 and 1.25 deal sourcers
for every generalist investment professional in these firms.
Fee-for-service deal sourcing
is the emerging trend in deal sourcing in the industry. "These services typically will do
on behalf of a partner client to generate conversations with potential sellers. It looks and feels like it is conducted by the buyer themselves."
Hiring M&A intermediaries
to source deals on the buyer's behalf has been a trend in the industry since long.
are another method that is used for deal sourcing. Examples of such platforms include Axial and Intralinks Dealnexus.
Looking for deal signals is an advanced method used for deal sourcing. In this method, PE firms "engage in an
where they actively look for companies that are sending up deal signals."
Some firms also employ
strategies to look for deals in targeted sectors.