LHI: Private Equity focuses on its strengths

08/10/2010

The 2008 shock is overcome: the fundraising of European private equity industry continues its stable growth trend with a profit of 5.6 billion euros in the first quarter of 2010 compared to 3.6 M € billion on the previous quarter. According to the industry information, "Alt Assets," the funds mainly from growth capital and buyout funds were raised, the traditional fields of activity of private equity. In these segments, therefore, investors have the most confidence, the business model they trust most stable returns over the typical holding period of five to eight years.

Clear favorites recognizable

The medium-term bond system together with the relative to other asset classes far less breathless assessment practices of private equity investments portfoliostabilisierenden the effect of corporate shares. The industry likes to point out that realism is moved into the market: Particularly popular are enterprises from the information technology, medical technology, biotechnology and clean tech, including renewable energy.
Europe outperformed U.S.

Also, the deal volume remained fairly stable. In the fourth quarter of 2009, lists the statistics of Prequin 11.4 billion U.S. dollars in 120 buyout deals in the first quarter of this year 11 billion U.S. dollars in 113 transactions. The development in Europe runs so much more positive than in the U.S. and encourages the Fund Managing Private Equity Fund II LHI European middle class in his decision to put the investment focus on European companies with solid growth potential.
 SMEs increasingly opens
Especially the middle class will open a study of Rödl & Partner increasingly According to financial investors. This has to do with the resolution to a traditional bank relationships that make it difficult for medium-sized clear and get some cheap credit financing.

On the other hand there is the striking capital shortage even of German small and medium enterprises, the results from this very intimate relationship with the former bank. Long-term private equity managers, who do not want to make quick profits on recapitalizations, but in fact and provable pursue strategic growth of its portfolio companies, medium-sized companies provide valuable support other than equity in regard to strategic direction of the company, optimizing processes and funding issues.

Decrease of reservations

Also on the part of the private equity industry reservations are removed. Minority interests are now for most fund managers no more No Go, but are also part of the investment universe. However, here in advance of the investment detailed consultation and due diligence processes required in order to avoid legal pitfalls and to ensure synchronization between the interested partners.
 Private Equity has demonstrated its flexibility in a lot of market phases and is clearly on track to provide for any period after the financial crisis right answers to questions from investors and capital-seeking entrepreneurs to be able to, is the conclusion of the LHI-capital market experts