"Our survey findings and other supporting data not only contradict growing misperceptions about the private equity industry, they also indicate that firms are playing a key role in helping the middle market sustain itself and grow in an economic climate that remains challenging and uncertain," said Don Lipari, national executive director – private equity services for McGladrey and office managing partner of the firm's New York office. "
Additional findings from the 2012 survey include:
• Onshoring is becoming more prevalent as Chinese labor and freight costs rise.
• The impact of tax policy changes on investment and operational strategies is uncertain. While changes to the carried interest tax rate is more likely to be felt at the fund-level, nearly 40 percent of respondents are currently unsure of whether an increased rate will have a significant impact on investments and operations.
• IT deficiencies at portfolio companies continue to be an issue, as firms look to generate operating metrics on a more real-time basis to drive operational improvement and monitor progress. "Not only are these firms increasingly focused on growing their portfolio companies as a primary means of generating value, they are increasing headcounts on the ground level as part of that process," said Milton Marcotte, national practice leader – transaction advisory services for McGladrey.
The 2012 survey represents responses from more than 100 private equity firms across the country and provides insights on current trends in strategy, employment and other key areas. McGladrey partnered with private equity research firm Pitchbook on the survey.