Tightening liquidity skims froth off market

The lack of liquidity in the market has seen a sharp decline in the ability of large buyout houses to strike deals in the EUR2bn+ segment, dragging overall value levels back towards the underlying level driven by small and mid-cap transactions.

As credit became cheaper and more widely available, a small number of EUR2bn+ transactions increasingly accounted for a disproportionate share of the value of the European buyout market. Value levels in the sub EUR2bn space also crept up, with a small spike in 2007, due to abundant liquidity, but in comparison to EUR2bn+ deals these increases were more proportionate to the volume of deals done in this segment.

This graph appears as part of the unquote" Debt Report, an upcoming publication by unquote" which examines the state of the leveraged loan market and its impact on private equity.

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