Other operators also now arise debt providers

Were it so that a new bubble Almost eight years after the implosion of the venture capital in the wake of the collapse of the technological values and the Internet, the investment world is found again in the grip of a crisis which exceeds. The significant difference that this time, it is not innovation funders who had assigned to the chimera of valuations to the number of "clicks" victims but acquisitions by debt specialists, who suffer abuse widespread leverage in the economy.

Thus, the golden age of the "leveraged buy out" (LBO) lasted only three years. "Everyone knew that the business could not stay eternally on the pace of expansion of the recent period but, up to the worsening of liquidity of banks a month ago, could still expect a landing relatively gently. "There, it is very brutal," says the Manager of a European LBO Fund.

Temporary freeze

Indeed, as a first step, valve leveraged finance is gradually INAT. The flight of large investors in high-yield debt gave a first blow to stop large LBO. For a year, only 8 acquisitions to leverage more of EUR 1 billion were concluded in Europe, against 45 during the previous twelve months, according to the Candover-incisor Media barometer. In France, only two operations (Converteam and Cegelec, bought by the Qatari Diar sovereign Fund) will exceed this threshold this year.

Become, with the mezzanine, the only providers of debt LBO debt, Fund banks issued still funding before last summer. Certainly in dribs and drabs and with great caution but enough to fuel operations to a few hundreds of millions of euros as a goal, houses of the world, Etanco, minus or CEPL. In total, only 8 transactions over EUR 100 million have been signed in France in the first half, against 51 over the whole year 2007, according to the Center for Management Buy - out Research. At this rate, the French market of the LBO in value would therefore be in 2008 to its 1998 level. Gold, since the acceleration of crisis Bank mid-September, the financing of the "buy-out leveraged" medium is also temporarily frozen, leaving that regional institutions to grant loans in tens of millions of euros to small LBO.

High manoeuvrability

Worse, some LBO firms start to see skid their results against their plan of walking. So raise the concern of their bankers, or even cause a rescheduling of debt. The list of affected areas goes a little more each day, from construction to real estate development through specialized distribution materials. Here also, the deepening of the banking crisis has consequences. "Some banks prefer to sell their debt to the Fund, even with significant discounts", is the head of a French Fund. The impact of the financial crisis is less present for other traditional crafts of the investment capital, the financing of SMEs in minority equity being same booming ( 69 in the first half in France). But in its whole, sector seems lived his finest hour with regard to the influx of fresh money. The fundraising, although held in the first part of the year 2008, fell in the third quarter to their more low since early 2005, has been Private Equity Intelligence.

Despite this blow to brake, the non-coté is still figure to prosperity Island relatively spared by the tsunami of the "subprime". Because investment funds retain a major asset in their game: liquidity. 1.364 Billion surveys in the world between 2006 and the end of the first half of 2008 gave them ammunition to invest during the next four to five years. Even without access to credit, their maneuverability remains very high in an economy where the cash, massively fleeing to gold or the State titles, more than ever King.

"Trade will return lever and more than expertise in the purchase of assets with a high haircut," predicted a professional. With the fall of the stock exchange, listed companies and revert attractive targets, participations in groups of the CAC 40 having represented 46 of the investments of the LBO players in the first half in France. Other operators also now arise debt providers. For the non-coté, the crisis is more than ever the opportunity to seize new opportunities.