Passing the buck

Yet, overall, volume is still low compared to the same periods last year. Not only are deals rarer, but they are taking longer to complete, both due to the gap in price expectations between vendor and buyer and the uncertainty regarding forecasts. As a result, predictions of when the market will pick up again have been further delayed from early Q3 to Q4 2009.

This question was also the topic of a recent roundtable organised by Celerant Consulting. With a panel of bankers, corporate financiers, GPs, LPs and journalists, views were varied, particularly when the discussion steered towards placing blame for the crisis. Among the scapegoats were banks' reward schemes resulting in undue motivation to give ever larger loans; clouded judgement on the side of private equity professionals; and incomplete due diligence where advisers were compelled to tailor reports to please the client rather than reflect the actual facts.

Chances are that all these factors contributed to the spiralling of valuations and as one private equity professional humbly admitted: perhaps GPs had become slightly arrogant. If he was right, this has certainly vanished now, with most GPs being hands-on with their portfolio companies and re-focusing their attention to ensuring operational soundness of their businesses.

Another topic of discussion was the regulatory changes for the industry. Although Nordic GPs seem relatively unfazed by the circus in Brussels, there was outcry among its European and UK-based peers. Nonetheless, a consensus was reached at the round table that for the future private equity must focus on flexibility, transparency and regulation.

Yours sincerely,

Rikke Lilla Eckhoff

Editor, Nordic unquote"

Tel: +44 20 7484 9824

rikke.lilla-eckhoff@incisivemedia.com.

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