Private equity sees risks and reward in uncertain times

Fri Feb 26, 2016 11:04am EST
 
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By Freya Berry

BERLIN (Reuters) - As anxiety over a slowing global economy grows, private equity players are looking to swoop on distressed assets but are fearful that funding could dry up.

A record number of delegates from private equity firms and investors turned out this week for four days of networking at SuperReturn in Berlin, the industry's main annual gathering.

At first glance a number of glitzy afterparties suggested the good times were continuing to roll as they have in the years following the financial crisis.

But faced with upheaval in global asset markets, political uncertainty and a tougher debt environment, the sense was that the music could soon stop.

"It's not doom and gloom among the GPs (general partners)," one large investor said, referring to the private equity companies whose job it is to buy businesses.

"But they're not popping the champagne. People are trying to get fundraising done now before the environment changes," he added.

The plunge in oil and gas prices weighed on the minds of many. One executive who was raising money for a major oil investment vehicle told Reuters that the fund was considering cutting its target size due to caution from potential investors.

He said this was frustrating at a time when a mass of assets are coming to the market as energy companies seek to cut their losses.   Continued...

 
Traders work on the floor of the New York Stock Exchange (NYSE) February 23, 2016. REUTERS/Brendan McDermid