Buy-Out Investors Look to Europe

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Byline: Caroline Meehan

The US private equity industry is fast losing investors as big deals dry up and Europe becomes the hotbed of top-end transactions.Investments in Europe have almost caught up with the US and accounted for 47% of deals this year, according to data from Thomson Venture Economics, the private equity data provider, and the National Venture Capital Association. This compares with 5% eight years ago.

Seven of the top 10 global deals by value were in Europe in the three months since March, according to a review by Zephus, the mergers and acquisitions data provider. They were worth 75% of the quarter's total value, or [euro]12.7bn ($14.3bn).

The top two deals were the [euro]3.7bn buy-out of Seat Pagine, Italy's directory business by BC Partners, CVC, Investori Associati and Permira, and Permira's [euro]2.2bn buy-out of Debenhams, the UK department store chain.

The manager of a large fund of funds said: "The European industry has grown; there are more opportunities from conglomerates slimming down, and indigenous funds are able to go after these deals. A few years ago Candover had a [pounds sterling]200m fund, now it has billions to spend, and the same with Permira and the others."

Fiat, the Italian carmaker, has sold non-core subsidiaries to reduce its debt, including FiatAvio, its aerospace business, which was recently bought for [euro]1.5bn by the Carlyle Group, one of the largest buy-out houses. …