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07 December 2011

FT: Private equity struggles to find finance


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The volume of European private equity deals has dropped to its lowest level since the height of the financial crisis two years ago, as buy-out groups struggle to finance deals amid the eurozone debt crisis.


Europe’s buy-out market has shrunk to $11.5 billion in the current quarter to date, a mere fifth of the transaction volume seen in the fourth quarter of 2010 and the lowest level since the second quarter of 2009.

“It is becoming increasingly difficult to do anything in France. In Scandinavia, the Netherlands and Germany you can still finance smaller deals with a large club of banks”, said Michael Kalb, European head of US private equity group, Sun Capital Partners. “All you can get from one single bank will be €25 million.”

Christophe Evain, chief executive of Intermediate Capital Group, a listed debt and private equity investor, said: “It has to be a prized asset and even then there are not many banks around that are still lending”.

Full article (FT subscription required)



© Financial Times


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