Today's crowded, expanding private equity market means that buyout multiples continue to climb, making the deployment of capital a persistent challenge for fund managers. According to 2019 Global Private Equity Outlook, a new report by Dechert LLP and Mergermarket, this environment is forcing managers to think creatively by scaling up, using long-term capital, or creating differentiated strategies in order to gain a competitive edge.

The report includes insights from a survey of 100 senior PE executives, including these key findings:

- Bespoke Primary Acquisitions: To combat competition and higher multiples, respondents said they were very likely to make acquisitions based on industry or market differentials, create vertically integrated portfolio companies, or build a portfolio company from scratch with a hand-picked management team.

- Consortium Deals: Club deals, including transactions with significant co-investment commitments from LPs, are becoming more widespread, though challenges remain, such as determining sources of financing and finding the right consortium partners.

- Long-Term Hold Funds: Long-term hold funds continue to grow in popularity as a means to increase returns and improve deal flow.

- Minority Co-investments: Major private equity houses are increasingly turning to minority direct co-investments when direct investments are not possible.

- Partnering with Strategics: A majority of respondents are somewhat or very likely to consider collaborating with strategics.

- Specialization: The vast majority of respondents said that having a specialization or niche had become important to their firm.

- 2019 Outlook: Creative structures will continue in 2019, while U.S. tax reform, technology, tariffs and the heightened scrutiny of foreign buyers in multiple countries will all make their mark.