Private Equity deal flow in the first quarter of 2017 has slowed compared to the end of 2016.The first quarter of 2017 saw 745 transaction closed totaling $118 billion in value compared to 867 deals totally $138 Billion in the final quarter of 2016.It should be noted, however, that 2016 started the same way with a slow first quarter before hitting record highs.Further, while 2017 has seen a slow start to private equity transactions, the fundamentals point to a strong year and fundraising continues to be strong and private equity buyers continue to sit on a record amount of dry powder.As of 2016, private equity funds were sitting on over $500 billion in equity of dry powder.

One of the difficulties in the current private equity market is the continued high multiples that targets are commanding.2016 saw elevated EBITDA multiples and 2017 has thus far provided more of the same as the median EBITDA multiple for the first quarter of 2017 was 10.8x.These high multiples, coupled with strategic buyers willing to pay top dollar, have challenged private equity funds looking to deploy capital.Strategic buyers continue to pay higher prices due to the fact that they have cash, are looking to boost revenue, and can often take advantage of synergies often not available to private equity buyers.

So while the first quarter of 2017 has been lackluster for many private equity funds in terms of deal value and deal flow, the hope for many private equity investors is that deal flow ticks up in the remaining three quarters of 2017m similarly to what investors saw in 2016.