A GlobeRisk Perspective on Private Equity
Private Equity is a natural consequence of the relentless drive towards financial markets efficiency. In essence Private Equity can prosper where the following conditions are met:
- A supply of under geared businesses (i.e. businesses whose relatively low risk profile would support a higher proportion of debt rather than equity finance)
- Cheap business valuations in relation to economic conditions and prospects, and or potential business performance (following the introduction of a new management team)
- Availability to realise value in future times
It should not be too surprising therefore that Private Equity is thriving in most Western Economies. We see this success as continuing., at least in the UK where equity valuations still look very attractive in relation to economic prospects.
In our view the major threats to continuing success are a widening of credit spreads in relation to equity prices, or a major UK stock market rally.
GlobeRisk has consultancy services to private equity
In 2007 GlobeRisk can offer the following services
- Expert due diligence reviews
- Strategy and Business development
- Corporate turnaround
- Interim Management