In an economy marked by challenges and uncertainty, confidence among private equity investors has dropped to the lowest level in three years with one third of respondents expecting conditions to worsen, according to the latest Deloitte CE Private Equity Confidence Survey. This comes in contrast with the previous survey released in May when the general sentiment among investors was optimism. However, deal-doers are upbeat about new deals with 50% intending to buy more than they sell in the coming months – more than double last survey’s figure.
“Indeed there is a big contrast between the current survey and the one in spring but one should not be surprised as summer was marked by renewed threats of Greek default and global political and economic uncertainty,” said Hein van Dam, Partner Deloitte Romania. “With three deals announced during the summer, Romania remains firmly on the radar of investors.”
Despite the general pessimistic sentiment, expectations of increasing leverage across the region continue with 53% of respondents expecting more liquidity, the highest level since 2006.
There is also renewed optimism in the start-up scene, with a tenth of respondents expecting start-ups to be the most competitive assets, the highest figure ever recorded by Deloitte’s survey. It is not entirely surprising, given a handful of venture funds announcing closes in the last two years. CE has spawned a number of first-class start-ups, many of which have grown to world leaders under the tutelage of private equity backing.
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