Early-stage firms hit as downturn continues

First quarter investment activity figures suggest that the private equity market is still some way from recovery.

Private equity investment is continuing to fall in Europe and showing little sign of recovery, according to the Initiative Europe Q1 2002 Barometer published today.

Total deal value has fallen to E11bn for Q1, down by a third on the previous quarter figure of E16.6bn. Deal volume has also dropped significantly, with just under 200 deals carried out over the period, a drop of 48 per cent.

The largest fall has been seen in early stage investments, which generated E90m across 30 deals, with both deal value and volume recording 63 per cent decreases on results for Q4 2001. The largest recorded early stage transaction in Q1 was AMPJE’s E16m investment in oil operator Tuscan Energy.

Buyout activity was also down on the previous quarter with deal value and volume both down by over 30 per cent. This comes despite the announcement of the Nomura sale of the Voyager pub chain to a consortium led by Cinven, which accounted for nearly a quarter of the E8.9bn invested in Q1. Other major deals in this sector included BC Partners acquisition of Galbani, which was sold by Danone for just over E1bn.