Private Equity Confidence Survey Central Europe

Experienced and well capitalized

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 39th edition of the programme.

Central European Private Equity Index: Key findings

  • GPs want to invest, and it is a buyers’ market, with roughly half of deal-doers expecting to focus on new investments, down on the winter figure but still a healthy level given the uncertain backdrop. The continued appetite for transacting may be due to an expectation that valuations are coming down, with 14% of respondents feeling vendors have decreased their price expectations over the last six months, double last Survey’s response of 7%, and 65% believe they will continue to do so. Pipelines are robust, with over two-thirds (70.6%) feeling the work-in-progress is roughly the same as four months ago and nearly a fifth (17.6%) feeling pipelines have actually improved.
  • It will be tricky to leverage deals, with respondents expecting the availability of leverage to decrease over the coming months, with over two-thirds (71%) anticipating a reduction in the availability of debt, up markedly from 30% in the last Survey. The last time the level was this low was in Autumn 2011, when confidence was also down. A nascent non-bank lending market in CE may cater to demand.
  • Economic expectations and confidence are very low. Economic expectations are pessimistic for the coming months, with a more than doubling of respondents expecting conditions to worsen (from 41% to 86%). This is even higher than when the pandemic first hit, and no respondents expect an improvement. Economic sentiment and our Index typically move in tandem, and the confidence fall to 58 is one of the Survey’s steepest declines.

Following a sharp bounce-back in confidence post-pandemic, the world is now dealing with inflation and the war in Ukraine, with both having profound impacts on people’s lives and global economies. Our Survey’s nearly 20 years have shown us that each shock has been followed by a strong period for transacting followed by a rise in confidence and economic conditions, and we expect this to follow suit. What is different now is the region’s deal-doers’ cumulative experience in steering businesses through adversity and helping them on paths back to growth, with the pandemic a recent lesson in this.

- says Ivana Lorencovičová, Deloitte Partner and World Impact leader for Deloitte Central Europe.

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