PE’s Index makes largest gain in 17-year history as confidence returns

Central Europe’s private equity markets felt the impact of Covid-19, but the drastic dip in confidence seen over the summer has given way to the largest confidence gain in Deloitte survey’s 17-year history, nearly doubling from 62 to 123 in the latest ‘Deloitte Central Europe Private Equity Confidence Survey’. 

The Survey reveals a complete reversal of market sentiment since our last Index, with the vast majority of deal-doers (63 percent) expecting an increase in activity in 2021, up from just 17 percent in the summer. Additionally, nearly three-quarters of deal-doers (73 percent) expect to buy more in the coming months, the highest proportion since 2011. 

“These are very encouraging signs at a time when confidence had been ebbing. The extraordinary year dented – but did not break – confidence. This is positive, though not entirely surprising given the region’s established deal-doers have more than 20 years of deal-doing experience behind them to draw on,” Mark Jung, Deloitte Partner, and Deloitte Central Europe Private Equity Leader, said.

The market will focus more on new deals, with a near 50 percent uptick expecting to prioritize that (65 percent, up from 45 percent last time). These deals will be supported by robust leverage markets, with over three-quarters of respondents positive about leverage availability – 63 percent expect the availability of debt finance to remain the same, and 13 percent expect it to increase over the coming months – a refreshing change from the last Survey when most (62 percent) expected a decrease. 

“The market has evolved greatly since the Global Financial Crisis – structures, deal types and growth strategies are all now very well established and so private equity backers can be a great support to companies already in their portfolios as well as others seeking sustainable paths back to growth in the coming months,” Mark Jung said.

(WBJ)