Back on track
Central European Private Equity Confidence Survey October 2013
An improving economic backdrop has helped restore confidence, which is crucial to deal-doing. We are bullish that the foundations are in place for a return to healthy private equity activity in CE. Garret Byrne, Private Equity Leader for Central Europe
We’re delighted to report that our latest survey shows a continuing improvement in sentiment. This marks the first time in four years that we’ve recorded two consecutive periods of increasing confidence among Central Europe’s private equity deal-makers.
Sentiment continues to improve markedly this year, with confidence reaching its highest level since 2011. More than two fifths of respondents (43%) expect an improvement in economic conditions, up from 10% during the previous period.
This may be a reflection of restored confidence in the Eurozone, as well as the gentle recovery in some of the region’s economies. For example Poland, Europe’s sixth largest, narrowly missed slipping into recession at the beginning of this year and is now forecast to post 1.1% growth this year, rising to 2.4% next year, according to the country’s central bank.
The fund closes recorded in 2013 means there are local private equity funds with fresh capital to deploy. A third of respondents expect activity to increase over the next six months, nearly twice the proportion expecting an uptick in the previous survey.
Another encouraging sign is the sharp decline in the number of respondents expecting a reduction in market activity: just 2% expect activity to decrease over the next six months, down markedly from 17% during the last survey.
An improving economic backdrop has helped restore confidence, which is crucial to deal-doing. We are bullish that the foundations are in place for a return to healthy private equity activity in CE.
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