Private equity funds news

Managers of private equity associations in emerging markets, Europe, America, Asia and Australia were asked the same question – is the crisis already finished for the local private equity market?

Sarah Alexander from Emerging Markets Private Equity Association (EMPEA) said: “To a large degree, yes. But until we see activity levels return fully to pre-crisis levels or to another steady state level, no one should declare victory just yet. That said, from a macroeconomic perspective, it appears that the worst impacts are behind us as most emerging economies are predicted to grow strongly in 2011 and 2012.”

Uli Fricke from European Private Equity and Venture Capital Association (EVCA) answered: “This was not a crisis for the European Private Equity market. But the financial crisis precipitated an economic down turn affecting businesses right across the European economy. However numerous studies have shown that Private Equity backed companies have recovered faster from these down turns than their competitors.”

Jürgen Marchart from Austrian Private Equity and Venture Capital Organisation (AVCO) said: “I think the crisis is finished mainly, if it is finished finally will be seen.”

Alessia Muzio from Italian Private Equity and Venture Capital Association (AIFI) said: “In 2010 the Italian private equity and venture capital market showed signs of recovery, especially in the second half of the year. Fundraising activity returned to grow and the same happened for the number of investments. Divestment activity, although still below pre-crisis level, showed an improvement as well and write offs reached the physiological level of the past. However, the two main hurdles on the horizon remain fundraising, with particular reference to foreign investors, and exit, considering also the fact that IPO are still not very common among SMEs, given the high costs.”

Marie Reinius from Swedish Private Equity and Venture Capital Association (SVCA) answered: “One should not say that it is over but we are seeing positive tendencies in the market. The number of investments is increasing again and we are also noticing substantial exits. However, the only thing lagging is the fundraising numbers. But we are hoping that this will catch up during 2011 and 2012.”

Juris Grišins from Latvian Private Equity and Venture Capital Association (LVCA) said: “It appears so. Year 2010 saw creation of 4 new funds and since then investments have followed in rapid fashion.”

Richard Remillard from Canada’s Venture Capital and Private Equity Association (CVCA) said: “By and large, investment levels have picked up as has merger and acquisition activity.”

Cate Ambrose from Latin American Venture Capital Association (LAVCA) confirmed that the crisis is finished for private equity market in Latin America.

Luis Antonio Márquez from Mexican Private Equity Association (AMEXCAP) answered: “Certainly due to the flow from local pension funds.”

Mahendra Swarup from Indian Private Equity and Venture Capital Association (IVCA) said: “The number of deals as well as the deal value has almost double in last year compared to 2009, the private equity players are again upbeat on the Indian economy. Undoubtedly, the crisis did affect the Indian fund raising process and investments but it was not as affected as badly as some of the other economies with the primary reason being that the demand and growth in the Indian economy comes from the domestic customers as opposed to countries like China which are growing but are largely dependent on the exports which they do to the developed countries.”

Katherine Woodthorpe from Australian Private Equity and Venture Capital Association (AVCAL) said: “Mostly, though the retail sector still hasn’t fully emerged from the crisis as consumers are saving more and watching their spending more carefully. Nevertheless job vacancies are at an all-time low across the economy and generally Australia was reasonably unscathed by the crisis.”

So we see that almost all representatives confirm that the crisis is mostly finished for private equity markets around the world. 

Source: Private Equity Russia & CIS Journal (www.percis.ru)