PRINT THIS PAGE Trends in European / US Private Equity
01/11/2004. Source:Weil, Gotshal & Manges.
Weil, Gotshal & Manges in conjunction with mergermarket look at trends in European/US private equity. In this report, they include a special feature on France, frequently cited as one of the more attractive destinations for private equity investment opportunities, in part due to the reorganisation of large French companies, but also considered one of the more challenging, from a legal and cultural perspective. This special report examines whether those views are still prevalent. Over the past few years, one of the biggest hurdles for any private equity investor has been the potential difficulty in following a viable and profitable exit strategy. According to the latest survey by the Institute of
Management Buyout Research (CMBOR), £8bn ($14.5bn) worth of exits were recorded in the first half of 2004 in the UK alone, almost matching the full year figure for 2003.
A similar, but less pronounced upsurge has occurred in the US. In Europe, the exit void has been partially filled by secondary buyouts, but IPOs and trade sales have been a feature of the first 6 months of the year. In our survey, 53% of respondents expect trade sales to be the primary course of exits over the next 6 months, particularly amongst US private equity respondents (83%).
It is interesting to note that only 9% of our respondents expect IPOs to be the primary source of exits in the next 6 months. That may, at first sight, appear to be somewhat surprising and at odds with what actually happened in the first 6 months; in Europe, in particular, there was a marked increase in the number of PE-backed IPOs. In the first 6 months of 2004, private equity firms took 25 companies public. In the preceding two years, they managed just 11 IPOs in total.
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This research is published by the Private Equity Group of Weil, Gotshal & Manges. The Private Equity Group's practice includes the formation of private equity funds and the execution of domestic and cross-border acquisition and investment transactions. Our fund formation practice includes the representation of private equity fund sponsors in organising a wide variety of private equity funds, including buy-out, venture capital, distressed debt and real estate opportunity funds, and the representation of large institutional investors making investments in those funds. Our transaction execution practice includes the representation of private equity fund sponsors and their portfolio companies in a broad range of transactions, including leveraged buy-outs, merger and acquisition transactions, strategic investments, recapitalisations, minority equity investments, venture capital investments and restructurings. For more information please visit www.weil.com
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