Change and survival

01 January 2008

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Deals arranged before the summer are still completing in Spain and Italy, albeit behind schedule. Some of them have even been fortunate enough to benefit from ephemeral instruments such as portable financing (see Deal in Focus, page 28). Nowadays, there is a considerable amount of self-praise from GPs for every deal closed - when 3i acquired gardening business GGP from ABN AMRO Capital, it was said that a "good dose of courage and creativity" was key to a successful acquisition.

The above quote may seem cheesy, but it makes sense: audacity and imagination will be needed to stimulate deal doing in these meagre times. During our Italia Congress recently (see page 22), general comments were that obtaining leverage for deals now became a tiresome quest involving negotiations with three or four banks, increasing GP workloads by threefold. Additionally, rumours of crumbling deals and reverse break-up fees for large transactions have also reached Southern European shores. In the wake of the credit crunch, "private equity firms will need to act as a banking team, making constant market analysis or find a really good adviser," according to John Singer of Advent International, speaking at the unquote" Italia event. "The days of being a generalist are over," he added, while other panellists at the event also agreed that sector expertise is a must. Testament to this is the proliferation of specialist funds for segments such as luxury goods, namely Louis Vuitton's L Capital, already established in Italy and now tapping into the Spanish market. The shift may bring good news for both the SME segment - which still offers opportunities aplenty and remains blissfully unaffected by the debt wobbles - and well-prepared GPs with the necessary savoir-faire.

Speaking of change, this seventieth edition is my last as the Editor of Southern Europe unquote". I would like to thank you all for your continued support and hope you have enjoyed reading these pages as much as I have enjoyed writing them. Francinia Protti-Alvarez is now taking up the honour and can be contacted directly on +44 (0)20 7004 7476 or francinia.protti-alvarez@incisivemedia.com. Have a great Christmas break and a very successful and prosperous 2008.

All the best

Angelica Mari

Editor, Southern Europe unquote"

angelica.mari@incisivemedia.com.