Private equity companies 'bounce back'

Private equity companies have bounced back after being hit hard by the global financial crisis, the credit crunch and the subsequent recession that followed, according to a new survey.

The Association of Investment Companies (AIC) spoke to some of the managers of these companies to gauge their opinions about the outlook of the sector this year.

Private wealth investors will note that the AIC found that increasing value in portfolios had helped lift the share price of many of these companies, with the average company up 23 per cent over the last year.

Alex Barr, manager of the Aberdeen Private Equity Fund Limited, said that investors were returning because of the increased "optimism for private equity fundamentals" and were boosted in confidence by private equity funds seeking to address liquidity issues.

He added: "Increased levels of M&A are providing a better exit environment and lifting valuations at which unrealised companies are being held in portfolios."

Timing is seen as key for sensible investment. Now that the economy is on the precipice of recovery, taking advantage of it when it comes will reward astute private equity companies.

The AIC was formed in 1932 and is the trade body for the closed-ended investment company industry.

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