LISTEN NOW: ‘It feels a bit like 2007’ says Investcorp’s Ben-Gacem

The Bahrain-listed investment firm's European PE head speaks to Private Equity International about high pricing and his concerns about an inflated market.

Private Equity International caught up with Investcorp’s European head of corporate investment Hazem Ben-Gacem at the end of January. Amid political uncertainty in Europe, tensions on the Korean peninsula and expectations of a downturn in public markets, are industry professionals still optimistic about the investment environment?

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Ben-Gacem also spoke about the firm’s plans to launch a blind-pool funds model alongside its deal-by-deal model due to increasing appetite from its investors for such vehicles, as well as the market’s state of deal fever and high prices that are well in excess of historical averages.

“It feels a bit like 2007,” he said. Lenders are offering an “exuberant” level of leverage, sellers are commanding multiples of more than two or three times the historic average, and buyers are paying 14x for businesses that historically have struggled to trade above 8x.

“That is the big concern… any excess will sooner or later deflate.”