Deloitte: Private Equity Confidence at Three Year maximum
Prague, 11 January 2018 – Confidence and outlook in private equity is on the rise in Central Europe finds the latest Deloitte Central Europe Private Equity Confidence Survey. At the end of 2017, the Confidence index reached 130, the highest value in the past three years.
The growth of confidence is supported by strong economy and GDP growth. As many as 90% of respondents expecting the healthy backdrop to remain the same (64%) or improve (26%) over coming months. Respondents are hungry for deals: two-thirds of respondents expect to focus mostly on buying in the coming months, and funding them should be smooth, given a doubling of respondents expecting leverage to become more available (21%) – the highest level in two years. Deal sizes may also be set to increase, with 36% of respondents expecting them to go up – the highest level in more than a decade since the heyday of spring 2017.
“The economy and optimism of consumers and companies keep growing, along with the appetite of private equity for investments. Supply is also growing, together with the offered prices for purchasing companies – the owners do not want to miss the moment of the highest possible selling price and they enter negotiations with investors more willingly,” says Miroslav Svoboda, Partner in Charge of the Financial Advisory and leader of Deloitte Private in the Czech Republic.
The survey has also revealed vendors’ strong expectations on pricing are here to stay, and possibly increase: a third of respondents (31%) feel vendors will ask more for their assets over the coming months, while most of the remainder (61%) feel current expectations will remain. Indeed most respondents (54%) felt sellers had increased their pricing expectations over the last six months.
You can read the full Deloitte Central Europe Private Equity Confidence Survey here.