Private equity space still in peril

Winterflood Securities warns the private equity sector still faces widespread challenges despite recent results showing a rise in net asset values.

It believes the sector still faces difficulties in areas of financing and disposals, and is also susceptible to any downturn in the economic recovery. The majority are also still trading at double digit discounts. “So far, this year’s private equity reporting season has been in marked contrast to that of twelve months ago,” Winterflood says. “Last year, the dramatic falls in NAV were a reflection of the effect of declining comparable multiples, coupled with high levels of gearing. “This year, most funds have seen a rise in NAV valuations lending strength to the view that the sector...