PE executives bullish on deal opportunities over the next 12 months

London: Senior executives of private equity firms are maintaining a cautious but optimistic outlook on the state of the economy, both locally and globally.

According to the results of the latest Ernst & Young Capital Confidence Barometer, nearly half (48 per cent) of the 150 PE investors surveyed globally were optimistic about the number of deal opportunities in 2012. Fewer than 6 per cent remain pessimistic, down from 11 per cent six months ago.

The Global Capital Confidence Barometer is a regular survey of senior executives from large companies around the world conducted by the Economist Intelligence Unit. E&Y polled a panel of over 150 PE investors in February-April 2012 from 22 countries for the current Global Capital Confidence Barometer.

This is matched by the overall corporate sentiment in the barometer. Globally, 31 per cent of the 1,500 respondents indicated a likelihood to divest in the next 12 months. Forty-four percent of large companies – those with revenues of $5b or higher – indicated their interest in making acquisitions in the same time period.

The availability of credit has become an important concern to PE investors, particularly as developments in the Eurozone have unfolded. Globally, more than 70 per cent of survey respondents described their level of confidence as ''positive'' or ''stable.'' In North America, 9 out of 10 respondents viewed credit availability the same way.

Jeff Bunder, global p rivate equity leader at Ernst & Young comments, ''Corporate M&A activity is an important component of a healthy PE environment. The increase in divestitures on the part of corporates is a welcome sign for PE buyers and is an indication that asset pricing has stabilised. Additionally, there is growing confidence in the availability of credit, a key component to PE deal-making.''