Apax Partners publishes global private equity environment rankings report “Private Equity in the Public Eye”

Apax Partners publishes global private equity environment rankings report “Private Equity in the Public Eye”
 

5 July 2007

Thursday 5 July 2007 - Apax Partners, a leading global buyout firm, today published the 2007 global private equity environment rankings, under the title: 'Private Equity in the Public Eye'. The report, produced with the Economist Intelligence Unit, reviews the private equity operating environment for 33 countries.

This is the second year that the private equity rankings have been published, and therefore the first in which observations can be made on whether countries are becoming more or less open to private equity. At a time of heightened political and media interest in private equity, the report also looks back over the last few months and gauges the views of opinion formers in the industry.

The top two countries in the ranking, the US and the UK, remain constant, while Canada jumps one spot on last year's position to replace Australia in third place. Along with Ireland at number eight in the rankings, these countries could all be described as conforming to the Anglo-Saxon model. They were found to offer a stable regulatory framework, encourage market-based competition, have highly developed financial systems and foster entrepreneurial policies and attitudes that are likely to encourage higher levels of private equity.

These countries have also been bolstered by the inclusion of a risk category in this year's ranking, which has cemented the places of developed economies at the top of the ranking and less developed ones at the bottom. The one exception is Australia, which slips from third to seventh on the back of a poor risk score.

Despite generally having their ranking buoyed by the inclusion of this new rating, many other large European economies still fare relatively badly. Germany lies in 12th place, France 15th and Italy a lowly 25th. These economies have less experience of private equity and, frequently, less public and policy support. Environments that are geared towards stakeholders, rather than entrepreneurs, also adversely affect their ranking.

The ranking is not intended as an indicator of overall private equity activity. Inevitably the lure of large markets such as China and India mean that firms will look to do business in these countries even if the environment is currently challenging. Perhaps it is more useful to think of the rankings thus: imagine how much more investment there might be if only the environment were better.

Looking across the industry, there is no doubt that private equity is fundamentally in good shape. The numbers tell us that fundraising and returns in all private equity deal stages have rarely, if ever, been better.

However, scrutiny of private equity is increasing even in countries that have historically taken a benign view of the industry. Private equity houses appear now to realise the potential the criticism has to damage their business and have started to react. As a consequence, there will be an increased focus on communicating the benefits of private equity to the marketplace.

ENDS

 

NOTES TO EDITORS

Apax Partners is one of the world's leading private equity investment groups.  It operates across the United States, Europe and Asia and has more than 30 years of investing experience.  Funds under the advice of Apax Partners total $20 billion around the world.  These Funds provide long-term equity financing to build and strengthen world-class companies.  Apax Partners Funds invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Financial & Business Services.

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