23 Oct COTW: Disconnect Between PE Multiples & Return Expectations
The chart below can be downloaded here.
Private equity valuations have recently jumped higher and at 10x enterprise value-to-EBITDA (EV/EBITDA) multiples are at/near the highest levels of this cycle. Historically, pricing at these levels has resulted in lower forward realized returns. We would side with the “no” camp in Pitchbook’s mid-year investor survey.