UNQUOTE

Global cooling

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Private equity activity right now is frozen, with very little new deal activity taking place. When asked, investors mention they are taking their time to analyse possible targets and see how business plans match up to constantly evolving trading conditions, while others are busy fending off rumours about their portfolio companies, refinancing them or worse still - cutting their losses

So the frozen surface hides activity burgeoning below, from nationalisation, to private salvaging of banks, to debt restructuring involving (at times) insolvent banks (the case of Iceland comes to mind).

Take the example of Hypo Real Estate (HRE) in Germany, where JC Flowers (which de facto controls a 24% stake), faces growing criticism. HRE could receive a state capital injection prior to its nationalisation.

Meanwhile in Italy, Sator Private Equity just invested EUR110m to become a majority shareholder in Banca Profilo, a small local institution. The rescue was carried out with the approval of the Bank of Italy, which advised Banca Profilo to find new outside shareholders to boost its capital reserves.

If you have any news you want to share or comment on, don't hesitate to get in touch, my details are below.

Yours sincerely,

Francinia Protti-Alvarez

Editor, Southern Europe unquote"

Tel: +44 20 7004 7476

francinia.protti-alvarez@incisivemedia.com.

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