November 2011 - TMT are not going to ‘unplug’

Despite current market travails, investors in TMT are not going to ‘unplug’. Investing intelligently in this $1 trillion industry (which is growing at around 4% a year) is continuing at pace. Economic conditions and valuation issues dominate buyers’ concerns, and volume is down, but motivated buyers are still getting deals across the line and deal flow is strong, both geographically and in most sub-sectors. Minority stakes are also becoming more common.
November 2011 - Italian private equity shows its promise

As long as politicians in Brussels continue to struggle to find a solution to the eurozone crisis, macroeconomic fears will cast a long shadow over the Italian economy. For private equity in the country, however, there are some positive signs in the market that should not be ignored.
November 2011 - CEE: at an inflection point

Of all the regions in Europe, it could be argued that the private equity industry in Central and Eastern Europe should have the most cause for concern regarding the turmoil currently engulfing the eurozone. Despite a fairly strong showing from a macro perspective since the onset of the financial crisis, the past three years have not been kind to private equity in CEE.
October 2011 - German private equity paints gloomy picture

The German private equity community has painted a pessimistic outlook for the industry over the next nine months, as sovereign debt woes, sluggish economic growth and low demand continue to put the brakes on an economic recovery.
October 2011 - Communication: growth in an uncertain environment

Renewed uncertainty in Western economic zones may create opportunities for private equity managers who know their onions!
September 2011 - PE in CEE

Central and Eastern Europe has suffered since the onset of the global economic crisis, as investors have perceived other emerging markets – including the BRIC countries – as higher growth and lower risk. This is set to change.
September 2011 - Turkey: private equity land of plenty

Turkey sits at the confluence of where the troubled West meets the vibrant East. As its neighbour Greece threatens the economic stability of the eurozone, will Turkey’s nascent private equity industry be derailed?
September 2011 - Clause for thought

As economic uncertainty continues – extending now well beyond four years since the onset of the credit crunch – senior teams at some private equity firms have become increasingly unstable as the promise of carry from current funds becomes ever more remote. However, when key men do depart, as seen at a number of firms in recent months and years, the matter is rarely as straightforward as a simple LPA breach:
August 2011 - CEEing is believing

Central and Eastern Europe has suffered since the onset of the global economic crisis, as investors have perceived other emerging markets – including the BRIC countries – as higher growth and lower risk. This is set to change.
July 2011 - Management in the driving seat

It has long been suggested that the balance of power is shifting from away from private equity firms in the great LP / GP debate. Now, however, it appears buyout houses are having to cope with the increasing influence of company management.
July 2011 - Sheep / goats / shepherds – who’s flocking to whom

Amid signs that Facebook may have reached saturation point in the countries where it first enjoyed explosive growth* valuations are under increasing scrutiny. The debate continues about where value lies and whether the best bets will be on data led/broadband based models which create the best promise for future projected income or those where Average Revenue Per User (ARPU) can already be identified but where growth rates may not be as great.
June 2011 - Sector specialisation the key to “fitness for the future”

The recent HEC and Dow Jones “Private Equity Fitness Ranking” – an annual measurement of private equity houses’ likely future performance – throws up an interesting weighting on industry sector focus. Of the ten criteria relevant to future “fitness”, three contain an element of sector specialisation.
June 2011 - Team-building exercises: the way to an LP’s heart

There is nothing more important in a GP’s armoury than its team. However, in the mid-market, limited partners have historically focused almost solely on the select few individuals at the top of each private equity firm. This is now changing.
May 2011 - Debt restructurings set to rise

According to the latest data from S&P, it seems as though defaults in Europe are back under control, with an average default rate of 4% - well down from the 13.6% seen in late 2009*. However, the bulk of debt restructuring in Europe is yet to come:
May 2011 - Business services: active times ahead in 2011

Amid the doom and gloom surrounding wider M&A activity both in 2009/10, the business services sector proved to be a notable highlight. Further deals are expected. Many of the recent deals in this sector have featured a cross-border element, and this internationalisation of business services M&A is becoming a notable feature in the sector.
April 2011 - When is a wall not a wall?

Today’s Debtwire’s report notes that Europe’s wall of maturing debt has been repeatedly flagged as a significant issue by market participants in recent months. But TPG’s David Bonderman recently dismissed concerns surrounding the much discussed debt financing wall, saying that it is simply going to go away, owing to the robustness of credit markets, and particularly in the US, the bond market. Additionally, he suggested, input prices are rising, particularly for food and energy, which will impact inflation and, for levered companies, inflation is your friend.
March 2011 - Setting out the future for private equity fundraising

While opinions differed widely over how much the balance of power has shifted in favour of LPs, there was a consensus that investors are reducing in number their GP relationships. This means fewer, but larger, commitments.
March 2011 - Say it with pride: "Ich bin ein PE-er!"

Smiling faces predominate at Super Return this year, which marks a welcome change from last. There is a sense of cautious optimism – or as one keynote had it, paranoid optimism – given continuing fears of double dip recession, Middle East tension, high oil prices and sovereign debt concerns. For private equity, more optimism surrounds investments and exits, debt availability and terms, but less, perhaps, around fundraising. But there is also a clear sense that the industry is still going through a significant period of change, and will need to continue to be vigilant and adapt to what confronts it over the coming period.
March 2011 - Views from the mid-market: times are improving, but only the very best firms will prosper

The increasingly competitive nature of the mid-market in Europe is developing into a real issue for LPs, as they reflect on where to allocate money in the future. Prices are higher than average, and for those companies with good growth outlooks and strong management teams, GPs could be looking at prices of more than 10 times earnings, which perhaps shows that institutional memory is not as good as it should be.
March 2011 - Private equity lives to fight another day

In an interesting session on day three at Super Return it was agreed that all the macro signs suggest that private equity should not outperform wider markets, however, the room was nonetheless full of optimists. The level of optimism has also risen significantly since last year, when average expected returns were from private equity were 8%, while this year the expectation going forward is an average of 17.5%. Interestingly, historic data show that the average return over 20 years is around 12%.
March 2011 - Secondaries in 2011: on a rising tide

Deal flow in the secondaries market has changed significantly since 2009, with financial sellers now out there in droves, driven by regulatory change.
March 2011 - Who will raise, and who will not?

Ever since the start of the economic downturn, when overcommitted LPs were forced to radically scale back private equity investments, debate has raged over whether a permanent shift in the GP / LP dynamic was taking place.
March 2011 - Industrial services: growing momentum

The Industrial Services sector has seen a high level of M&A activity in recent months – most recently Investcorp’s sale of technical services group Moody International to Intertek for $730m. This is set to continue strongly, as various themes drive growth:
February 2011 - An end to amend and extend

The predicted wave of private equity-backed insolvencies following the Lehman crash never materialised, thanks in large part to banks’ reluctance to realise losses and the knock-on effects on the value of their wider portfolio. As a result, “amend and extend” became the mantra of the asset class.
January 2011 - Private equity looks online for growth

Recent, private fundraisings for social networking and online sites in the US have been reminiscent of the dotcom bubble. Facebook, which was valued at $50 billion last month is now valued at more than $80 billion; and with investors currently paying up to $60 a share, has a nominal valuation of $136 billion. Considering that 2010 revenues were around $2 billion, that is an extraordinary valuation. By comparison, Amazon trades at around 2.2x revenues, with sales of $34 billion in 2010 and a valuation of around $75 billion.
January 2011 - Public vice; private virtue

Following the recent announcement that the UK economy has slipped back into reverse gear, with GDP for Q4 2010 shrinking by 0.5%, it is becoming ever clearer that the only route out of the economic malaise is via the private sector.
January 2011 - Secondary criticisms: at least private equity provides consistent support

There is increasing scrutiny of the rights and wrongs of secondary buyouts (and their offspring, tertiary and quaternary), which continue to rise in volume.
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