Index makes largest gain in 17-year history as confidence returns
The pandemic caused activity to pause and confidence to dip, but Central European private equity is utilising its experience and capital to help regional companies survive and even thrive in today’s backdrop.
January 13th, 2021
Central Europe’s private equity markets felt the impact of Covid-19, but the drastic dip in confidence seen over the summer has given way to the largest confidence gain in our Survey’s 17-year history, nearly doubling from 62 to 123 in the latest Deloitte Central Europe Private Equity Confidence Survey.
The Survey reveals a complete reversal of market sentiment since our last Index, with the vast majority of deal-doers (63%) expecting an increase in activity in 2021, up from just 17% in the summer. Additionally, nearly three-quarters of deal-doers (73%) expect to buy more in the coming months, the highest proportion since 2011.
Deloitte Central Europe Private Equity Confidence Survey
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These are very encouraging signs at a time when confidence had been ebbing,”
- says Mark Jung, Deloitte Partner and Deloitte Central Europe Private Equity Leader
The extraordinary year dented - but did not break - confidence. This is positive, though not entirely surprising given the region’s established deal-doers have more than 20 years of deal-doing experience behind them to draw on.
The market will focus more on new deals, with a near 50% uptick expecting to prioritize that (65%, up from 45% last time). These deals will be supported by robust leverage markets, with over three-quarters of respondents positive about leverage availability - 63% expect the availability of debt finance to remain the same, and 13% expect it to increase over the coming months - a refreshing change from our last Survey, when most (62%) expected a decrease.
The market has evolved greatly since the Global Financial Crisis – structures, deal types and growth strategies are all now very well established and so private equity backers can be a great support to companies already in their portfolios as well as others seeking sustainable paths back to growth in the coming months,
- Mark continues.