Insight

European Private Equity Outlook 2015

THE EUROPEAN PRIVATE EQUITY ("PE") OUTLOOK 2015 IS THE SIXTH IN A SERIES LAUNCHED BY ROLAND BERGER IN 2009. THE OUTLOOK INCLUDES A SURVEY OF OVER 800 EXPERTS FROM PRIVATE EQUITY COMPANIES ACROSS EUROPE.

The results accurately reflect what experts in the market expect for different countries and regions and what they consider relevant factors for the private equity business in 2015

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Key Results

European Private Equity Outlook 2015

The mood in the PE-driven M&A market is back to more conservative levels PE activity is expected to grow at lower levels than in 2014

  1. Half of the PE professionals saw their expectations met regarding M&A activities in 2014 One third experienced a worse than anticipated development

  2. The majority of respondents perceive the availability of targets as the main reason for the 2014 development, followed by macroeconomic situation and pricing of targets

  3. After an optimistic outlook in 2014, private equity professionals are again quite conservative about the number of M&A transactions with PE involvement in 2015 Only 62% of the respondents expect more transactions than in 2014 versus 82% in last year's survey and 52% in the 2013 outlook

  4. Compared to 2014 results, PE activity is expected to grow at lower levels in all countries except in Greece UK, Iberia/Italy and Scandinavia show the highest expected growth rates for 2015 at around 2%; overall, anticipated growth levels in 2015 are again closer to the conservative 2013 results than the more bullish expectations for 2014

  5. Similar to previous years, pharma & healthcare and consumer goods & retail are expected to be the most active industries in 2015 Energy is down significantly in 2015 as against 2013

  6. Acquisitions of mid-sized companies are thought likely to dominate once more 86% of PE transactions in 2015 are expected to be in the range of up to EUR 250 million (vs. 88% in 2014 and 91% in 2013)

  7. In 2015, PE investors focus on the same phases of the PE value chain as in 2014; though still not the main focus, the importance of fundraising will significantly increase in 2015 compared to the previous year, with availability of financing improving slightly

  8. One half of PE managers expect no significant change in the competition for funds, while the other half anticipate an increase in competition – Slight tightening of tension evident compared to 2014 

  9. Only 44% of the participants expect available targets to be more attractive in 2015 than in 2014, 41% are uncertain High confidence levels of 2014 (57%) remain an exception as 2015 results are close to 2013 expectations again; parts of groups/carve-outs are expected to be the most important source closely followed by family-owned firms

  10. The majority of respondents (62%) see a need to adapt the PE business model – For the first time, three quarters of PE professionals no longer believe in the robustness of the current model

  11. Active portfolio management and strategic/operational actions will be the strongest performance levers in 2015 – 95% think passive approaches do not work
  12. Exits via M&A with strategic or PE investors are once again likely to dominate in 2015 – Other exit channels such as IPO or dual/triple track trail behind considerably

 

Roland Berger Strategy Consultants, founded in 1967, is the only leading global consultancy of German heritage and European origin. With 2,400 employees working in 36 countries, they have successful operations in all major international markets. Their 50 offices are located in the key global business hubs. Their services cover the entire range of management consulting from strategic advice to successful implementation: e.g. new leadership and business models; innovative processes and services; M&A, private equity and restructuring; and management support on large infrastructure projects.

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