In 2011 Private Equity (PE) experienced healthy activity, with mid-market and large deals over €500 million all growing strongly.
Our results leapt forward as a result, with net sales up by 18% on the back of an excellent performance in Germany and a robust outturn in our largest market, the UK.
Our success reflects a concerted effort to proactively harness our sector and functional expertise resulting in really targeted support to PE houses. We also succeeded in working for more of the industry’s biggest names and now lead the market with a 32% share in providing buy-side due diligence on successfully completed large deals in Europe.
With PE houses having plenty of money to spend, after a slow 2009, we saw a substantial increase in investment activity in both 2010 and 2011. Debt levels on some deals have even approached pre-crisis levels via high yield issuance.
Appetite to do deals remains strong. However, uncertainty resulting from sovereign debt issues in the eurozone and other contributing factors led to a tightening of credit financing towards the end of the year. Currently this is having an impact on investors’ ability to raise leverage and therefore complete deals.
Regulation of the industry will also be an issue in the year ahead, with significant changes being brought in under the US Dodd-Frank Act, Europe’s Alternative Investment Fund Managers Directive and changes in the US tax regime.
Long term we expect healthy growth in the developed markets and excellent opportunities in new and emerging markets, for example Russia and Turkey. We have an integrated offering across Europe and globally, and this enables us to provide high-quality services to all our clients.
*Growth rate figures in the 'Markets' sections are for ELLP firms at 30 September 2011, ignoring the impact of mergers and exchange rate fluctuations (see note 3)