(1888PressRelease)
October 10, 2007 - Private equity firms will mitigate the impact of the credit crunch on their profits by focussing on smaller deals, it has been predicted.
According to Barry Giarraputo of Apollo Managament, by adopting this strategy, leveraged buyout firms will be able to maintain the level of returns they give investors.
He told Reuters: "For the foreseeable future you won't see the large mega-deals, but we look at deals every day and deals will still happen.
The financing is very challenging, but overall the returns will probably still outpace (other investments).
"Certainly the expectations from investors do have to adjust, but private equity remains solid overall."
Mr Giarraputo's vote of confidence in the private equity sector comes at a time when investment in buyout financings appears to have slowed, with large deals with heavy leverage and loose lending terms being hit especially hard.
Statistics from the Centre for Management Buy-Out Research showed that the value of global private equity deals fell 24 per cent during the last quarter to £14.9 billion, compared with the preceding period™s figure of £19.7 billion.
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