Buyout Pros Wary Of Future Private Equity Landscape

Nov 26 2008 | 12:17pm ET

Private equity executives believe the credit crisis will lead to a number of changes in their industry, but exactly what changes are still anyone’s guess.

According to research from Celerant Consulting, an overwhelming majority of respondents (73%) see no recovery in private equity business levels before the first half of 2010, although 23% believe a full recovery will come before the end of 2009. Europeans, notably German and French respondents, are more pessimistic in outlook than their American peers.

Almost all industry executives expect there will be fewer deals over the next year, and most believe that these will be of considerably less value than previously. The research says that consolidation of private-equity firms is clearly one expected consequence of the crisis, but industry executives are just as clear that financing models will have to change appreciably.

In the current environment the vast majority of managers plan to increase the equity/debt ratio of their deals, although no more than one-third is ready to make acquisitions in the current climate without securing debt facilities at all.

In the meantime, p.e. pros surveyed show no urgency to complete deals in this climate.  In fact, two-thirds of respondents are prepared to hold off on investments in the expectation of more attractive deals materializing in the future.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of