Middle Market Weekly Outlook

“For many investors… private equity beckons as a singularity soothing and lucrative safe haven,” free from volatility and nearly guaranteeing impressive returns.

But has private equity actually been more successful than the public markets? A new paper by professors from Booth, Darden, and Saïd Business Schools conclude that private equity returns have “actually been mediocre” — since 2006, the industry has “been running on par with the S&P.”

Fortune’s Roger Lowenstein dives into the report, which also finds that “so-called persistence — the tendency of a PE firm’s past results to be predictive going forward — has plummeted.”

Insights

• 2015 is officially the biggest M&A year ever (plus, is M&A too hot for its own good?)
• Strong job report almost certainly means a rate hike is coming
• …and U.S. credit market is already tightening
• Private equity fundraising is set to reach $629 billion, with shadow capital on the rise
• Bloomberg calls Axial the “Tinder for M&A”
• Family offices expect to increase investments in PE
• There’s lots of dry powder in the oil patch these days

Transactions

• Harren Equity Partners recaps Circa Corp
• Lee Equity Partners sells PDR Network to Genstar Capital
• D’Orazio Capital Partners buys Red Head Brass
• Aquiline Capital Partners invests in OmegaFi
• TPG Growth acquires Taco Bueno from Palladium Equity
• Quad-C Management sells Balboa Water to AEA Investors
• ParkerGale Capital acquires OnePlus
• Vertical/Trigen Holdings to merge with Osmotica Holdings

This Week in History… On December 7, 1941, the Pearl Harbor bombing wreaks havoc on Hawaii, killing 2,403 Americans and wounding 1,178. The impact on the stock market was commensurate: The Dow Jones closed that night at 112.52 — a 4.08 point drop.