Pre 2009 “Boom” | 2009 “Transition” | Outlookpost post-2009 | |
Availability of Credit | • London a clearing house for Pan-European debt • Multiple suppliers of credit | • Limited bank underwriting • Limited bank loan volumes and high margins | • Local debt providers more important • Bank debt serves as “bridge” to capital markets |
Valuation Metrics | • High premiums to RAB and high EBITDA multiples | • Rebasing of valuations but vendors slow to adjust | • Valuations more attractive • More realistic and robust base case scenarios |
Capital Deployed | • Heavy focus on UK regulated assets • Few deals in Continental Europe | • Mix of UK and European opportunities | • Increasing focus on European infrastructure investment opportunities |
Investment Thesis | • Targeted returns from gearing and aggressive business plans | • Take advantage of distressed situations | • Focus on careful asset selection, execution and active asset management |
Execution | • Hotly contested auction processes • Sale of 100% stakes | • More bilateral negotiations • Fewer investors prepared to “lead” transactions | • Increased opportunity for partnerships and co-investments with governments and corporates |
High transaction volumes (c. €150bn) with focus on UK and on leveraged acquisitions | Low transaction volumes reflecting limited availability of debt, and vendor expectations | Significant transaction volumes reflecting growing need for private capital in European infrastructure |
Source: CVC Capital Partners