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While PE regains momentum after a disastrous year 2009,<br />
market conditions presented substantial challenges in 2010<br />
Executive summary (1/3)<br />
> Situation 2010 – PE market regaining strength after downturn in 2009 but still challenging<br />
> In 2010, <strong>European</strong> PE activity is starting to regain momentum after a historical low in<br />
2009 – PE investments have increased by 52% compared to previous year<br />
> The <strong>European</strong> economy is starting to recover, but long-term prospects still uncertain<br />
> <strong>European</strong> governments fueled growth with deficit spending, which may hamper growth<br />
in the long run and put the stability of the <strong>European</strong> financial system at high risk<br />
> The capital markets environment has substantially improved but remains buoyed by<br />
concerns about the sustainability of economic recovery<br />
> Low loan availability and volatile markets limit acquisition and exit opportunities,<br />
leverage levels of around 3.5-4.0x EBITDA require high equity commitments in LBOs<br />
> Margins have recovered despite sovereign debt woes. Due to low base rates, overall<br />
loan and bond pricing is below bull market levels<br />
> With approx. EUR 173 bn in committed funds available, <strong>European</strong> general partners will<br />
have to rethink how they can meet limited partners' return expectations in the future<br />
<strong>European</strong> <strong>Private</strong> <strong>Equity</strong> <strong>Outlook</strong> <strong>2011</strong>_Final_010411.PPTX 3
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