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Hedgeweek Comment: The re-emergence of private equity?


Not much more than a year ago, private equity players dominated the front pages, until the credit crunch began and the leverage fuelling the buyout industry to a large extent dried up. Over the past 12 months the industry has seemed to be in hibernation, bar the occasional deal that has been modest by historical standards. But is the beast waking up?

Shares in Taylor Wimpey, the UK housebuilder, shot up more than 10 per cent yesterday after weekend reports suggested that private equity groups, including Oaktree Capital, Apax, Permira and 3i, were considering a bid for the troubled business.

Meanwhile a group of investors headed by Iberian private equity firm Magnum Capital, has bought Portugal's largest wind power business, Enersis, from Australian infrastructure investor Babcock & Brown for EUR1.2bn. According to Magnum, the deal is the largest ever concluded by a private equity firm in the European wind energy sector.

Middle East-focused private equity firm MerchantBridge has joined forces with UBS Global Asset Management. MerchantBridge-UBS Private Equity will develop and manage a series of private equity investment strategies focused on the Middle East, including oil and gas services, financial services, and light and medium industries.

Is this the re-emergence of the private equity sector as we knew it? The leverage of the boom years has not returned, and many private equity funds that made acquisitions at the height of the boom are reported to be under water. But with company values in the doldrums and many private equity funds still awash with cash, the sector is starting to pounce on the manifold opportunities in the marketplace.

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