Preliminary figures released in the Q4 2011 unquote” Private Equity Barometer published by Unquote” in association with Arle Capital Partners, revealed total Q4 deal value down 39 percent on Q3 with volumes at the lowest level since Q2 1996.
The report showed an emphatic year of two halves with H2 deal values down 39 percent and volumes down 31 percent on H1 after a strong first half.
Commenting on figures and outlook for 2012, John Arney Managing Director of Arle Capital Partners said: “It should come as no surprise that the stream of first half (private equity) activity became a meagre trickle by the final quarter of 2011. The Eurozone sovereign debt crisis, the resultant economic frailty and the scarcity of available leverage finance conspired to delay or wreck a significant number of transactions. The outlook for the first quarter of 2012 is for more of the same.
“However, these issues will eventually subside and with private equity managers looking to deploy committed capital ahead of approaching expiry dates, there is considerable pent up demand for new deals. I would expect secondary buyout activity to lead the way as LBO lenders maintain their bias towards more responsible borrowers.
“The challenge for private equity owners is the search for increasingly elusive growth. Lateral thinking and a highly active approach to ownership is essential given that performance-enhancing boosts from unnatural levels of debt, remain firmly off the table.”
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