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Bankers optimistic over private equity prospects

According to a new industry report, investment executives expect private equity to play a bigger role in the M&A market in the first half of next year.

Private equity is expected to play a more influential role in the European mergers and acquisitions market in the first half of next year, according to an industry report out next week.

Cinven, the European private equity house, and Mergermarket, an M&A research group, surveyed more than 150 managing directors in investment banks specialising in UK, French and German deals.

Around 71 per cent of the investment executives polled said they expected the role of private equity firms in this arena to increase over the next six months, according to the report, which is being published by private equity firm Cinven.

The view that private equity-related M&A would pick up was held most strongly in the UK, with 77 per cent of respondents expecting an increase. In Germany 73 per cent agreed and 62 per cent of the French managers concurred.

More than half of the respondents (51 per cent) believed the increase would be driven by a fall in asset prices, resulting in a greater number of deal opportunities for private equity. The buyout market in particular is likely to accelerate as large corporations find they have to sell subsidiaries because of weakening balance sheets and cash flow management issues.