Weekly round-up: Q1 dealflow disappoints

Across all deal types, there were 308 private equity transactions recorded for all of Europe in Q1 – a fall of 16% on the 366 recorded in Q4 2013 – according to the latest unquote" Private Equity Barometer, published in association with SL Capital Partners last week. This substantial downward movement marks a five-year nadir in European private equity numbers. It wasn't all bad news though, with buyout dealflow in particular displaying much more resilience. In addition, deals sourced from private and family vendors hit their highest total in more than two years in the first quarter, showing the first signs of respite in the seemingly never-ending rise of the secondary buyout.

unquote" also caught up with Antoine Dréan, chairman of placement agent Triago and founder and CEO of online private equity platform Palico, to hear his views on the current fundraising environment and the rise of LP/GP matchmaking services. "Last year, Triago saw around 2,000 teams looking for an overall $800bn in the market – of that, $365bn ended up being raised worldwide, so a lot of fundraising efforts proved fruitless," Dréan noted. "LPs are still incredibly selective, partly because they still have a few scars from the boom years but also because they don't necessarily have the resources to look at everything in the market."

At the start of the year, the Kremlin released documents regarding an ambitious five-year plan for Russia's IT sector, stating that it has hopes of venture capital funding in the space doubling by 2018. unquote" correspondnet Ellie Pullen looked into the viability of this ambitious plan. "This is a very realistic scenario," said Alexey Solovyev, a managing director at tech-focused Russian venture firm Prostor Capital. "Russia's IT industry has already become the most attractive segment for venture capital firms – 70% of all investment falls on the IT industry today, and this trend is unlikely to change in the near future."

Over in the UK, Alice Murray shone a spotlight on the hitherto underused Patent Box, set up by the government a year ago to create a more competitive tax regime when it comes to innovation. Private equity firms could be missing out on this important value-creation tool, argued Bridget Walsh, UK & Ireland head of private equity at EY: "A real benefit of the regime is the extra value it can represent if preparing a company for exit. This is something that can be easily diligenced – it can be very clear if it's in or out of the regime. And you can be relatively certain of the value attached to the patent regime."

That's all from me this week but if you have any comments on this week's analysis, please send your thoughts to gregoire.gille@incisivemedia.com.

You can continue to follow me and the rest of the unquote" team via @unquotenews for all the latest private equity and venture capital updates, and of course on unquote.com.

Greg Gille
Acting Editor, unquote"

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