Investing in recovery

Others, however, caution that Germany's reversal of fortune is largely due to it benefiting from money being printed globally, warning of a potential backlash when the buyers of industrial goods suffer from inflation and cannot sustain the artificial boost to their economies. Some analysts also express concern that the woes of Germany's banking sector are nowhere near over. They argue that the "policy of the steady hand" (in other words: "waiting until the troubles go away") has failed to affect any real relief to a financial system that remains fragile and fraught with dangers.

Notwithstanding these debates, in the private equity space the panic over the short-term future seems to have subsided. During the fourth Deutsche unquote" Private Equity Congress, held in Munich on 1 October, industry insiders disagreed on the best way to move forward, but concurred that at least there are now some viable options, and a measure of visibility has returned.

However, there was a broad consensus that with market conditions remaining difficult, secondaries and turnaround strategies are going to become more prominent in the short to medium term.

Indeed, debates about the wider economy can be misleading. Just because the recession is over does not automatically guarantee safety for many businesses: weakened companies can fall in the fledging stages of a recovery as they over-stretch themselves in the pursuit of growth. With war chests filled during the fundraising bonanza of the past few years, private equity should therefore find rich pickings in the future.

Yours sincerely,

Mareen Goebel

Editor, Deutsche unquote"

Tel: +44 20 7004 7462

mareen.goebel@incisivemedia.com.

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