PE funds looking for cheap assets
Private equity professionals are expressing far more optimism about the overall economic climate in the next six months, with an expectation of a return to growth. Only a small minority of PE practitioners expect the economic environment to deteriorate further, while a significant proportion of respondents said they expect that the economies of Central Europe will outperform those of Western European countries.
“In Romania as well we are definitely seeing a strong private equity investors’ increase of interest in the existing sell-side mandates. Well-managed businesses with solid fundamental prospects remain attractive as investment opportunities. With the right investment partner, such businesses will be able to emerge from the downturn stronger,” said Hein van Dam (photo), Partner in Charge Financial Advisory Deloitte Balkans.
Despite high confidence among professionals about the recovery prospects of PE and the Central European region, it has been impossible to ignore the ongoing effect of the global financial crisis. “Negative impacts of the financial crisis will continue to be felt,” added Byrne. “Debt markets are still restricted and in the short term we expect there to be continued fall out with some of the weaker companies that have been less responsive in tackling the crisis failing.”
Frozen debt markets are still inhibiting M&A activity from resuming, with few respondents expecting that the situation will improve in the next six months.
While the number of Central European companies entering bankruptcy or insolvency proceedings has increased, some funds are seeing opportunity in this environment of corporate adversity. Distressed companies and companies in restructuring are becoming important targets for deal makers that want to buy assets cheaply and have the appropriate risk appetite and mandate to do so.
“In Romania as well we are definitely seeing a strong private equity investors’ increase of interest in the existing sell-side mandates. Well-managed businesses with solid fundamental prospects remain attractive as investment opportunities. With the right investment partner, such businesses will be able to emerge from the downturn stronger,” said Hein van Dam (photo), Partner in Charge Financial Advisory Deloitte Balkans.
Despite high confidence among professionals about the recovery prospects of PE and the Central European region, it has been impossible to ignore the ongoing effect of the global financial crisis. “Negative impacts of the financial crisis will continue to be felt,” added Byrne. “Debt markets are still restricted and in the short term we expect there to be continued fall out with some of the weaker companies that have been less responsive in tackling the crisis failing.”
Frozen debt markets are still inhibiting M&A activity from resuming, with few respondents expecting that the situation will improve in the next six months.
While the number of Central European companies entering bankruptcy or insolvency proceedings has increased, some funds are seeing opportunity in this environment of corporate adversity. Distressed companies and companies in restructuring are becoming important targets for deal makers that want to buy assets cheaply and have the appropriate risk appetite and mandate to do so.