Private equity buyout industry shows signs of recovery in Q1 2010 |
Date: Wednesday, May 19, 2010
Author: Investment Executive
Investment and fundraising levels that were up in the
first quarter as Canada’s buyout industry demonstrated signs of
recovering from the global economic slowdown, according to figures
released Tuesday by CVCA – Canada’s Venture Capital and Private Equity
Association together with research partner, Thomson Reuters.
In
this regard, the Canadian buyout industry’s experience has mirrored that
of its counterparts in the United States and around the world.
“The
data indicate that the Canadian buyout market stabilized in Q1, largely
as a result of increased investments by Canadian funds both here and
abroad,” said Gregory Smith, president of the CVCA and managing partner,
Brookfield Financial. “The strong fund raising record of the last three
years is now being deployed to take advantage of business opportunities
at home and across the globe.”
Canadian funds invested US$415
million in Canada in the quarter while American and other foreign funds
invested only US$40 million, down significantly from the US$381 million
invested by foreign funds in Q4 2009 and the US$567 million invested in
Q1 2009.
In addition to increased activity by Canadian funds at
home, Canadian funds invested substantially more abroad in Q1 than in
recent quarters. In Q1 2010, Canadians invested US$719 million in
companies abroad, which was 45% of the US$1.6 billion invested abroad in
the entire 2009 year.
Buyout fundraising remained modest in Q1
2010 with only US$260 million raised, barely 10 per cent of the US$2.8
billion in the whole of 2009.
“With investment levels picking up,
Canadian buyout funds are increasingly turning their attention to
fundraising from domestic and international sources which will be key to
maintaining robust investment volumes going forward,” added Smith.
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