Private equity firms trying to stay active in the shaky deals market that has thus far plagued early 2016 should focus their gaze on Europe, where attractive assets are plentiful and economic hardships faced by many other parts of the world haven’t had an impact, experts say.
Firms big and small have started the year off struggling to find attractive deals, regardless of sector, because of an uncertain global economy that has forced investors in many regions to hold their horses when it comes to deal-making. But while many private equity investors around the world are awaiting an economic turnaround or choosing to use this time to snap up distressed assets in the hope of an upswing in commodity prices, experts say bullish private equity firms would do well to look to Europe.
Howard Berkower, a partner with the corporate practice at McCarter & English LLP, described Germany as an attractive place for private equity investors that have found little in the name of promising deal opportunities so far this year. But he added that pricing may be an issue as firms look to acquire healthy assets that could immediately improve their portfolios.
Private equity activity in Germany had been on a slow rebound since the financial crisis, according to attorneys, and Berkower said that even the last decade or so had seen somewhat of a stagnation, though he added it has more recently began to truly “[come] out of its slumber.”