Chin up

No-one would dispute the fact that the industry is a different beast today than it was 12 months ago, but rumours of its demise have been greatly exaggerated. The sub-£100m market continues to thrive. Above that level, activity continues at a reduced pace, although significantly, the number of take-privates looks set to swell in 2008. Four hefty completions are expected in the first quarter - that of Abbot by First Reserve, Emap's B2B division by Apax, Northgate by Kohlberg Kravis Roberts and Inspicio by 3i. Add Biffa to this list, currently being looked at by HgCapital and Montagu, and the number of delistings for Q1 2008 could far exceed those in Q1 2007. This is not an industry that is dejected and unable to go about its business, but one that is robust in the face of altered conditions.

Additionally, another of 2007's big themes doesn't look quite as impressive as it did this time last year. Infrastructure funds were the variation of the alternative asset class that was set to take the world by storm. But now they have acquired all the water companies going in the UK, no-one quite knows what they are going to spend their money on. Private finance initiatives might be one way, with opportunities opening up in healthcare, but are these that attractive? According to Partnerships UK, the Government's information provider, one in five of these projects is unprofitable - not really good territory for alternative asset investors.

The summer's liquidity crisis spelt the end of one era and the beginning of another for private equity, but as the weight of this journal shows, buyout houses have adapted and continue to go about buying and selling companies.

Yours sincerely,

Sarah Young

Senior Editor, unquote"

Tel: +44 20 7004 7527

sarah.young@incisivemedia.com.

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