Index nears peak as confidence soars
Experience, proven growth strategies and improving economies are propelling confidence amongst private equity deal doers, according to the latest Deloitte Central Europe Private Equity Confidence Survey.
The Survey reveals an industry largely undeterred by events of the last 18 months, with confidence continuing its impressive climb to reach 149. Nearly a third (30%) of respondents claim their new deal pipelines are picking up pace as they gain comfort and confidence in the backdrop, reflecting optimistic economic expectations: 70% expect the economy to improve, and none expect it to worsen – the first such optimism since 2007. Less than a fifth (19%) feel growth plans slowed as a result of the last 18 months, while 43% are bringing forward M&A with existing (17%) or new (26%) targets.
Private Equity Confidence Survey
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We are encouraged though unsurprised by this very positive sentiment,” says Mark Jung, Deloitte Partner and Private Equity Leader. “Deal-doers in the region have built up resilience and experience they can draw on for supporting management teams. Funding options remain plentiful, and growth levers such as M&A have become a proven strategy for accelerating growth in companies backed by private equity.
- says Mark Jung, Deloitte Partner and Deloitte Central Europe Private Equity Leader
Pricing is high, and this is affecting appetites for transacting: 41% of respondents feel it is more expensive to acquire businesses now than six months ago, a four-fold increase on our winter Survey. Likely as a result, the proportion of those expecting to sell more than they buy over the coming months has tripled from 6% in the winter to 19% now. At the same time, those expecting to buy more has dropped from 72% to 57%.
The region is now one of experienced deal-doers driving meaningful value in the businesses they back. A high pricing environment may be incentivizing divestments despite attractive buy-side opportunities in the market,
- Mark continues.