2008 slump bodes long recovery

Much like the rest of the European markets, Benelux has experienced only a few rays of light against an otherwise gloomy backdrop of decreased deal activity.

Preliminary data from the 2008 European Buyout Review, published by unquote" in association with Bridgepoint, shows a 75% drop in value and 45% decrease in volume in the Benelux region against 2007 figures. When looking more closely at 2008, the first half accounted for over 60% of the entire year's activity in the region.

While activity increased between Q1 and Q2, the more significant difference is between Q3 and Q4, which saw a substantial drop. It is noteworthy to point out that the figures for 2008 may be somewhat skewed by a couple of sizeable transactions: CVC's EUR950m acquisition of supermarket holding Schuitema and the EUR750m Doughty Hanson-led purchase of administrative services provider TMF.

2009 kicks off as a year of mostly conservative (but not altogether pessimistic) predictions (see page 13). The first six months of the year are unsurprisingly expected to be slow against an uncertain economic backdrop, though some point to Rothschild's assertion: "the time to buy is when there's blood in the streets".

Demand for private equity and venture capital should increase, as businesses shunned by banks look for alternative solutions to finance their growth. As the new year begins, contrarian investment may be the way to go, since investors have historically made their best investments in times of difficulty (1988, just after the 1987 Wall Street crash, proved a stellar vintage in the US).

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