All's well that ends well

But things are looking far less scary than they were. Most LPs have actually regained consciousness since January and have honoured their commitments. In fact, some are now even whispering about being concerned at the lack of deals their fund managers are doing, with some vocally nervous that houses are spending too much time with existing portfolio companies and not enough spending money when prices are down. After all, they say, GPs are paid to invest throughout the cycle in businesses with growth potential and achieve superior returns through hands-on value add. Anyone can make strong IRRs in up markets.

Meanwhile, the BCG study has yet to prove itself, with just a handful of firms shutting its doors so far. Of course it takes years to truly wind down a firm, but in the mean time, quite a few have sprung up. In fact, at these early stages of the current creative destruction we're experiencing, the number of outfits may increase for a time before any true contraction is apparent.

Such innovation should be welcomed, since history shows us that many of the best outfits are born in downturns. Recessions have ways of exposing weaknesses, as we've witnessed, but they also reward strengths, and this too will become apparent. The stock markets are continuing their rally, and most GPs that unquote" speaks with intend to close a deal (or more) by the end of the year.

Here's hoping it's a true recovery, and not the first peak of a w-curve.

Yours sincerely,

Kimberly Romaine

Editor-in-chief, unquote"

Tel: +44 20 7004 7526

kimberly.romaine@incisivemedia.com.

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