Will private equity funds get more liquidity?
According to sources in ASCRIOne of the most positive figures of the year, and one which already shows a clear change in trend, was divestments. These recorded a volume (at cost) of €1,451m (up 21.31 Q1Y12 compared to 2012) in 268 transactions.
"One of the main reasons for the lack of liquidity of the venture capital funds is the difficulty they have encountered in recent years in selling their investees. In other phases of the cycle, it was usual for limited partners, once the capital had been returned, to reinvest it, generating new financing capacity in the system. Hopefully these divestments will inject new capital for SMEs in 2014," says Diego Gutierrez of Abra Invest.
The most used divestment mechanism (in terms of volume) was "Sale to third parties" (41.4%), followed by "Other mechanisms" (21.5%, influenced by the divestment in Orizonia) and "Repurchase by majority shareholders" (20.4%).
Major divestment transactions
Notable divestments include those carried out by Doughty Hanson in Avanza Group, View and Portobello in Indas, CVC in Revlon, Magnum in Teknon, Mercapital and Carlyle in ArsysArnela in Vetra Energia and MCH in Gamo and in Televida & Home.
What's in store for 2014?
In recent years, there has been some pressure from Limited Partners to accelerate some divestments in order to be able to return capital, as the average tenure had exceeded 6 years. The turnaround in divestments that began in 2013 is expected to continue throughout 2014, especially with those companies in the portfolio that are older and have managed to grow and internationalise.
Some divestments announced in 2013 will be finalised in 2014, such as the sale by Blackstone and Dynamia in Mivisa or the divestment of 3i, Landon and Hutton Collins in everis. For the companies remaining in the portfolio, the outlook is improving thanks to a slight improvement in domestic consumption, which we expect to consolidate this year.