Summary
New style investors in Europe . How can the risk minimize? What to avoid in investments?
Analysis
Battered corporate sector in Europe creates an opportunity for investors which wiling to inject fresh capital and turn around struggling companies. Many traditional private equity funds in their efforts to support portfolio companies in downturn, paved the way for distress assets investors. The reason - traditional private equity companies do not have skills to turn around companies. Their experience target growth. In the spotlight, in the new period come different style investors like HIG Capital. The company raised USD 3,5 billion for its affiliate to invest in distress securities last year. Third of this will be invest in Europe alongside HIC's Capital 600 million Euro buyout fund announced by Matthias Allgaier. HIG Capital and Bayside alongside private equity 3i secured a stake in Netherlands based VNU Media. The money have been injected as a part of restructuring of VNU debt. The professionals of HIG Capital expect many similar transaction before year end.
First phase of restructuring wave in Europe, swapping loans to struggling companies for equity stake, begins to break but only in Western Europe. In Eastern the pick to be expected after September. New approach of investment companies may describe as: avoiding real estate and does not focused to retailers. Second - to invest in SME in developed countries in Europe. And third - the companies have to have a strong market position and when market recovery they can to turn around quickly. This philosophy is own up by Allgaier from HIG Capital .
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
