Half-yearly figures from Italy and Spain offer mixed results

Italy continues to fare slightly better than Spain in private equity, according to recent half-yearly figures.

In Italy, private equity does not appear to have slowed following last year's record high figures. The first semester of 2008 saw investments totalling EUR2bn being recorded, this according to preliminary statistics released by AIFI. The figures, disclosed at its Institutional Investor Conference in Venice, suggest that private equity has remained resilient despite the gloomy economic climate, with investment levels well on course to match last year's total of EUR4.2bn. As of 31 December 2007, performance figures were also impressive; with the 15.1% average IRR significantly above the 11.5% and 12.9% reported for the European and US markets respectively.

In Spain, the number of deals rose by 16% from 367 to 426 transactions, according to figures released by ASCRI. The number of expansion deals increased and rose to represent 63.6% of deals and 52.1% of the volume invested, as opposed to 60% and 22% during the same period last year. But while fundraising activity also registered a new record, EUR1.88bn compared to 1.8 last year, most of the activity concentrated on the small-cap end of the mid-market. On the downside there were only two buyouts weighing in above EUR200m - Gamesa Solar and Union Radio - which explains the disproportionately low value total. In total, there was a 37% drop in investments from the same period last year.

Good news and not so good news continues to pour in, rendering it difficult to create a clear picture of what the future holds. It would appear that price expectations are normalising, while at the same time there are doubts about the health of some national economies and the overall state of the global financial system. Selectiveness, tempered by caution, a dose of patience and seasoned adaptability, seems to be the recipe for riding it out; at least for now.

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