Trends Report: The Micro-Small Cap Market

Sep 14, 2018 | Reports

Rising multiples may be headed for a correction, but it is not evident in the lower end of the market.

Looking across private equity transactions, 2017 saw continued high valuations, with a third-quarter peak and subsequent year-end decline. Across all private equity transactions, median enterprise value-to-EBITDA (EV/EBITDA) multiples came down significantly from 10X in the third quarter of 2017, to 6.3X in the fourth quarter. This movement could suggest a coming correction beginning to take shape for at least some of the investment landscape as we continue forward through 2018. Such indicators are not reflected in the micro-small cap space, suggesting that rich multiples will persist for at least the near-term, and that any correction in this space could potentially lag the broader private market.

Sections within this Trends Report include:

  • Persisting Rich Valuations in Micro-Small Caps
  • Slowing Deal Activity, But Less Evident in Lower End
  • Mind the Gap: Investment Far Outpacing Fundraising
  • Conservatively Identifying and Unlocking Value