Equity investment

Private-equity investment in the UK reached just £2bn in the first quarter of 2009, according to the Centre for Management Buy-out Research at Nottingham University, with two thirds of this total from just one deal.


Private-equity investment in the UK reached just £2bn in the first quarter of 2009, according to the Centre for Management Buy-out Research (CMBOR) at Nottingham University, with two thirds of this total from just one deal.


This compares to £1.3bn in the fourth quarter of 2008 – the lowest quarter for more than 13 years.


CMBOR, a provider of research and analysis on the private-equity market, sponsored by Barclays Private Equity, also reported that deal numbers declined to just 61 in the first quarter, from 92 in the fourth quarter and 152 in the same period in 2008.


‘We are witnessing a market showing little sign of life,’ said Christiian Marriott, director at Barclays Private Equity. ‘The very quiet first quarter is likely to lead to a very quiet 2009 and we expect few signs of green shoots of recovery.’


Analysis of CMBOR’s findings reveals that public-to-private transactions during the first quarter of 2009 accounted for more than 71 per cent of all deals by value (£1.4bn) from five delistings.


‘While there has been an increase in the share of public-to-private deals, there has been a corresponding decline in the number of family/private deals,’ Marriott continued.


The exit market has also remained slow in the first quarter of 2009. So far, there have been just 30 exits at just £221m. Exit value has been falling since the record year of 2006 when total value realised reached £26.9bn. Exits ended last year at just £9.8bn from 324 deals.


Marriott said: ‘In the recession of the early 1990s, private-equity investment stalled in much the same way and in quarter one of 1991 declined to just £447m. Receiverships also increased during this period – reaching 124 in 1991 – and it was only in the mid-1990s that the buyout market entered a period of robust growth. Conversely, receivership as a source of buyout deals peaked at 107 in 1991.’