Think positive

29 January 2008

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The liquidity troubles which dominated the latter half of 2007 had looked set to spill over into 2008. However, a destabilisation of the private equity industry in 2008 does not feel imminent. Private equity is cyclical and its investments are often much longer term than retail investors and hedge funds. This current phase is in many people's view just a bump in the road and a healthy correction, rather than a sign of a permanent downturn in the industry's fortunes. In fact, strategic debt structuring means that private equity is better prepared than in previous times of cyclical difficulties. The fact remains that private equity has a large amount of capital still to invest. In the US for example, private equity funds raised a record $302bn in 2007, a 20% increase on 2006.

France continues to see the completion of substantial-sized buyouts. Butler Capital acquiring an 80% share in Virgin France and Carlyle's purchase of Numericable and Completel for more than EUR1bn were being concluded at the turn of the new year. Deals of this size are still being done, giving a positive twist to the beginning of 2008. Private equity's success in the past has, in part, been down to its adaptable nature. Buyout houses may have to be more picky about which deals they do and accept that debt multiples are going to be lower than last year, but attractive opportunities still exist. Additionally, the new debt climate opens up doors for the smaller to mid-market players and mezzanine and distressed debt investors.

As a new year arrives, so does a new editor. I am taking over as editor of France unquote" from Julien Hall. I am pleased to join such a reputable publication, especially at such an interesting time for the French private equity market. I hope to maintain the excellent standard of the journal and your valuable readership. I would be grateful for any feedback regarding the journal and wish you all the best for an exciting and challenging year ahead.

Yours sincerely

Francois Rowell

Editor, France unquote"

Tel: +44 20 7004 7524

francois.rowell@incisivemedia.com.