Private equity industry faces 'perfect storm' as market turmoil bites

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BERLIN : Private equity investors gathered in Berlin at their annual get-together are fretting a season of record buyouts is drawing to a close after a week of market turmoil and recession fears as central banks across Europe have hiked interest rates.Cash-rich buyout funds are set to face higher financin

BERLIN : Private equity investors gathered in Berlin at their annual get-together are fretting a season of record buyouts is drawing to a close after a week of market turmoil and recession fears as central banks across Europe have hiked interest rates.

"Between China, supply chains and interest rate hikes which impact on valuations, it equals a perfect storm." "Deal volumes come down in periods of uncertainty because capital is shy," said Hazem Ben-Gacem, Co-CEO at Investcorp.The new environment has caused many deals to fall apart with private equity funds being unable and unwilling to pay up to fill the valuation gap.

"The new pricing reality has not yet sunk in and decision makers feel their companies are worth more," EQT's Brennecke said.

 

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