EUROPE/UK - European private equity has failed to maintain the momentum gained in the second half of last year amid economic and political woes.
Fresh figures from private equity data provider, Initiative Europe, show that dealflow more than halved during the first three months of this year, compared to the final quarter of 2002. The total value of transactions fell to E11.7bn, the lowest deal volume recorded since 1999.
The volume of completed transactions also plummeted to 173.
The report said: “Clearly European private equity has made an extremely slow start to the year.
“Uncertainty over the length and long-term ramifications of the war in Iraq, along with continued and global economic difficulties, has meant private equity practioners have displayed caution towards completing deals in Q1, 2003.”
Buyout and growth capital markets recorded the sharpest declines. There were four buyouts over £1bn in Q1, 2003, led by Cinven and Candover’s buyout of the UK bingo chain, Gala.
By contrast, early-stage investment remained relatively steady. There were 37 early-stage transactions recorded between January and March, with a value of E144m.
The report continued: “These figures are largely in line with the level of early-stage investment activity recorded throughout 202, which would imply that the worst fallout from the bursting of the technology bubble may be over for Europe venture capital community and that deal activity may have begun to stabilise.”
The biotech sector continues to be attractive, with the largest two early-stage transactions in Q1 being biotech deals.
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