Listed PE investors expect a buoyant 2010

A survey of publicly-listed private equity companies conducted by industry trade body London-based Listed Public Equity (LPEQ) revealed that all of its surveyed members expect a better investment environment in 2010 than the previous year. Of these, 27% believe that 2010 is set to be the best of the last three years, while 73% only expect it to better than 2009.

"We are optimistic as to the investment outlook for 2010, and although company valuations have increased somewhat, there remain a number of good value investment opportunities," says Wilken von Hodenberg of German mid-market private equity firm Deutsche Beteiligungs AG.

Most of the survey's respondents expect deal making to pick up as a result of better market visibility and a return to more consistent pricing expectations between buyers and sellers.  The past year has seen a significant pricing mismatch between buyers and vendors impacted by plummeting values of comparable public equity companies and low profit forecasts. Further, those surveyed also expect improved pricing in the secondary market to enlarge the scope for asset sales.

The majority of respondents as well expressed positive sentiment towards the debt markets, as 55% expect it to be less difficult to access leverage for private equity investments in 2010. 36%, however, predict the situation will be much the same as last year.

 "Contributing to the positive outlook is the gradual yet steady thawing of the credit markets, reflected in the pick-up in number of deals from the last quarter of 2009," says Tim Smith, chief financial officer at Guernsey-based fund-of-funds investor, Conversus Capital.

LPEQ is a group of 17 European listed private equity companies with a combined market capitalisation of over €5 billion. The survey results were part of wider research, with the second stage of results set for release in the second quarter of 2010.

 

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