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​Important Disclaimers
This article (the “Article”) is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any investment or any securities. This Article does not constitute investment advice and is not intended to be relied upon as the basis for an investment decision, and is not, and should not be assumed to be, complete. Readers should make their own investigations and evaluations of the information contained herein. The information contained herein does not take into account the particular investment objectives or financial circumstances of any specific person or entity who may receive it. Each reader should consult its own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning the information contained herein.  Except where otherwise indicated herein, the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date of preparation. Certain information contained in this Article constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,”  “target,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Readers should not rely on these forward-looking statements.  Certain information reflects subjective determinations which may prove to be incorrect. There can be no assurance that the estimates or projections will be accurate or that historical trends will continue. In considering the prior performance information contained herein, readers should bear in mind past performance is not necessarily indicative of future results. All rights reserved. The material may not be reproduced or distributed, in whole or in part, without the prior written permission of PrimeAlpha LLC.

    • Oct 15, 2018

Micro Private Equity: Generating Returns in an Expensive and Overcrowded PE Market

Micro Private Equity: Generating Returns in an Expensive and Overcrowded PE Market

Private equity investors are navigating a landscape marked by intense competition and escalating costs, with firms holding a record $1.1 trillion in dry powder. In response, attention is turning towards the lower middle-market, previously overlooked but now seen as a potential source of strong returns. However, high competition has driven purchase multiples to historic highs across all market tiers, prompting larger investors to venture downstream in search of viable opportunities.


Bain & Company's research highlights the growing importance of exit multiples in determining private equity success, challenging the traditional emphasis on operational improvements. This shift poses a dilemma for investors facing inflated valuations and prolonged capital lock-up periods.


Amidst these challenges, Micro Private Equity emerges as a compelling alternative, leveraging stable entry multiples and diverse acquisition targets to target robust internal rates of return (IRRs).


Access the full report to gain insights into how investors are navigating the evolving landscape of private equity, exploring opportunities in overlooked segments like the lower middle-market and leveraging micro investments to boost returns and diversification.



If you do not have a work email address, please email us at info@primealpha.com and we can email you the report directly.



Table of Contents

  • Introduction to Micro Private Equity

  • Imbalance in Private Equity: Causes and Effect

  • Record Multiples, Even in the Middle and Lower Middle Market

  • PE Returns Driven by Exit Multiples, Operational Execution Negligible

  • Where can Investors go?

  • The Micro Private Equity Opportunity

  • Barriers to Entry: Insulating the Micro Private Equity Market from Bulge Bracket

  • Complementary to Existing Private Equity Allocations

  • Investing Directly versus Funds

  • How to Invest and Who are the Players?




Thanks to our Contributor

Osceola Capital Management Logo

Osceola Capital Management offers access to the Micro Private Equity segment of the economy with proven results. The firm’s investment team possesses deep operational experience having founded, run and sold successful businesses.

Access PrimeAlpha Alternatives Education, Research, and Database of Managers and Investors
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