Private Equity Confidence Survey – Summer 2019

Analysis

Private Equity Confidence Survey - Summer 2019

Harvest mode

The Private Equity Confidence Survey has been tracking the changing sentiments of the Central European investment community every six months since 2003. Deloitte Central Europe proudly presents the latest report which marks the 33rd edition of the programme.

The private equity (PE) market in Central Europe (CE) remains quieter than the 2017 heydey, which saw a number of large exits and fundraisings make headlines. The market may be reverting to an equilibrium, with a steady flow of mid-market deals supporting growing businesses in the region. We are also seeing increasing venture opportunities, both entries and exits, with a number of funds being raised in this space.

A high-pricing environment combined with persistent uncertainty across multiple markets globally means that the CE market may be shifting focus into harvest mode, with new deal activity giving way to portfolio management and exits. We are encouraged to see the Index’s decline last year arrested in our latest survey, flat on our Winter edition to land on 102.

Current conditions in CE and indeed wider Europe see a backdrop of high pricing caused by record fundraising levels and liquid debt markets. With so much capital available to deploy, deals are going for high multiples as an increasing number of players vie for a limited number of sound businesses. Deals continue to be supported by liquid leverage markets: local and foreign banks as well as debt funds, a fairly new development in the region. While liquidity is currently high, and 75% of our respondents expect that to remain unchanged, it is notable that over a fifth (21%) anticipate a reduction in debt availability, a sign that frothy markets may not last.

Private Equity Confidence Survey

Download the report to find out more (PDF)

Harvest mode

CE PE houses have amassed rich expertise in deal-doing, with many of the region’s established houses now counting over two decades’ experience under their belts.  We see there is no shortage of deal opportunities and so attribute the high pricing to houses paying up for what they deem attractive opportunities. Some of the prospects may be deemed too expensive to transact in uncertain times, which is a sign that CE PE houses are exercising discipline in a time when that may be prudent,

- says Mark Jung, Deloitte Partner and CE Private Equity Leader. 

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