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Buyout bosses call the bottom of the market

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Almost three quarters of respondents predicted that the next leveraged buyout of €5bn or above would take place in three to five years. The remaining 27 per cent expect a mega deal to be completed between 12 and 24 months from today.

But pressure to invest means that two thirds of respondents believe that private equity firms will find a way to secure substantial transactions in the short term, predicting that the biggest deal completed by the end of 2009 will exceed €1bn.

“There are so many uninvested funds out there that a big deal has to happen. Private equity will develop deal structures to get money out the door, whether that involves putting in more equity, using more mezzanine or investing with sovereign wealth funds,” says Graphite Capital senior partner Markus Golser.

“By 2010 or 2011 we should see a return to economic growth and banks should be active again, so that should act as a trigger to larger transactions,” adds Frantz Paulus, an investment director at Crédit Agricole Private Equity.

Nevertheless, the majority of general partners surveyed believe that recent governmental bail-out plans have failed to put an end to global economic turmoil and that the FTSE 100 still has further to fall.

On average, respondents, who were surveyed in the two days following unilateral interest cuts last week, predicted the FTSE would bottom out at just under 3,900. A number claimed the index would not fall below 4,000 – only to be proved wrong – while others predicted it would plunge below 3,500.Related articlesDeal or no dealPrivate equity industry blamed for financial collapse

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